India’s cotton exports are projected to jump by 21 per cent to 8 million bales in the 2011-12 marketing year (August-July) on the back of record output and a possibly less restrictive government policy, a US Department of Agriculture (USDA) report has said.
The country had shipped 6.6 million bales of cotton overseas in the 2010-11 marketing year, the USDA said in the report. “For the 2011-12 season exports are forecast at 8 million bales,” it added. One bale is equal to 170 kg.
Exports are seen higher as the country’s cotton output is estimated at a record 35 million bales in the 2011-12 marketing year, as against 33 million bales last year, the report said.
The USDA report also noted that India, the world’s second-largest cotton producer, may adopt a less restrictive export policy to prevent any steep fall in domestic prices due to an expected increase in output in other countries, especially China.
“While the export situation is uncertain, there are several factors that point to the possibility of a less restrictive approach to cotton exports during 2011-12,” the report said.
The USDA explained that India may have fewer export restrictions to ensure domestic cotton prices do not fall below the minimum support price and avoid a situation where its procuring agency, the Cotton Corporation of India (CCI), is required to buy large volumes and run the risk of selling at a loss.
That apart, the domestic yarn industry is less likely to push for export controls due to significant stocks, it added.
In the 2010-11 season, India had capped cotton exports at 5.5 million bales and subsequently increased the quota to 6.5 million bales.
While the quantitative restrictions on cotton exports were lifted in August, 2011, the government imposed several other conditions for obtaining a registration certificate as a means of controlling exports, the report said.