Govt may decide to continue cotton exports under OGL by Oct

The textiles ministry today said it will take a call on continuing exports of the natural fibre under Open General Licence (OGL) before the beginning of the next cotton season in October.

Asked whether the government will allow cotton exports under OGL or cap the exports for the 2011-12 season, Textiles Secretary Rita Menon said,"We will take a call in September, by then full sowing comes in". Cotton season runs from October to September. The Secretary was talking to reporters on the sidelines of the 'Colours of Teej' exhibition here. She added, cotton production in the next season should be better than the ongoing cotton season. In case, the sowing is low, the government consider imposing quantitative restriction on export of cotton. On July 31, the government removed restrictions on the export of the natural fibre and permitted shipments under OGL for the remainder of the current season. Commerce Secretary Rahul Khullar has said that cotton exports for the remaining two months of the current season--August and September--have now been put under OGL. The registration of contracts for the exports with DGFT would continue to apply. In October last year, the government had capped cotton exports at 55 lakh bales (170 kg each) to protect the domestic textiles industry in the face of rising raw material prices. An additional 10 lakh bales were permitted for export in June, after prices had corrected sharply. Prices have declined to about Rs 31,000 per candy (356 kg) now from the peak of Rs 62,500 per candy in March-end. According to the estimates of the Cotton Advisory Board (CAB), the cotton surplus at the end of the current season would be 52.5 lakh bales on account of lower industry demand. In February, the CAB had estimated it at 27.5 lakh bales Likewise, the projection for domestic consumption of cotton this season has been lowered to 236 lakh bales, as against the earlier estimate of 265 lakh bales, on account of high inventories The cotton production projection, however, has been increased to 325 lakh bales for the current season.