Agri Business

Centre sews up loose ends in cotton export permits

M. R. Subramani Chennai | Updated on November 15, 2017


Notification levels the playing field, say industry players

Outflow of cotton exports will henceforth be regulated. In a notification issued for resumption of cotton exports registration, the Centre has capped the quantity that can be exported at one time.

The notification, issued on May 4 and seen as fool-proof, stipulates that an exporter can apply for only one registration certificate at a time, for a maximum of 10,000 bales (170 kg each) or the actual quantity shipped in the current season. The lower of the two will apply. Those who have exported up to 1,500 bales or players wanting to export afresh can apply to ship up to 1,500 bales.

Subsequent certification will be given only if 50 per cent of exports are completed against the permit issued. Exporters will have to provide documentary proof for this, says the notification.

The Government has also made it clear that permits, once issued, will not be revalidated.

“The notification is practical. Exporters with deep pockets can no longer corner exports, as they have been doing till now,” said Mr A. Ramani, cotton analyst.

“The notification provides an equal footing for those in the industry to export,” said Mr Anand Poppat, Vice-President of Saurashtra Ginners Association.

Regulated shipments

The notification is seen as an effort by the Government to avoid the kind of situation seen during February-March.

Then, sensing that the Centre could ban exports, as registrations were touching 100 lakh bales, some shippers got permits to export about 30 lakh bales. This took the total registration for exports to 130 lakh bales. “We have infrastructure to export only 10-11 lakh bales of cotton every month. But during January and February, more than 20 lakh bales were exported each month,” said Mr Ramani.

The notification will ensure that shipments are regulated at a time when the rupee had dropped to levels of Rs 54 against the dollar. This situation would have led to opening the floodgates for cotton exports.

“Generally, Indian cotton is now priced lower by at least 10 per cent compared with cotton from Memphis (US) or West Africa,” said Mr Ramani.

Shankar-6 cotton – mainly in demand for export – is currently quoted at Rs 35,000-35,500 for a candy of 356 in Gujarat.

On the International Commodity Exchange (ICE) US, cotton July contracts ruled at 87.90 cents a pound (Rs 37,000 a candy).

“The current notification gives small players a better opportunity,” said Mr Ramani.

The notification was issued after the Centre decided to permit registration for cotton exports. Last week, it decided to remove the curbs on exports. In another notification, the Centre has clarified that the Cotton Corporation of India is exempt from these regulations.


Published on May 07, 2012

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor