The meeting on April 3 could approve only some of the 2.5 million bales which are in limbo, registered but not yet cleared by customs.
Earlier this month, India halted fresh cotton exports after a record 9.5 million bales were sold overseas, stepping back from a shock total ban, and said it would review 2.5 million bales already registered but not shipped. Around 1 million bales cleared by customs, but not yet shipped at the time of the ban, were also allowed.
“Not all of the registrations will get final approval as some of them must have expired by now,” one of the government sources said.
“We are examining all pending cases minutely to ascertain their validity and genuineness,” another government source said. Traders said the government is worried some cotton may be going into the overseas warehouses of exporters as stocks. India, the world’s second-biggest producer of cotton, supplies about 13% of global exports and its biggest customer is China, which had criticised the initial total ban.
Trade Secretary Rahul Khullar said on Thursday ministers would meet on the matter next week. The government sources said the meeting was likely to be on April 3.
“If India does not export then that will constrain global exportable surpluses at a time when China is looking to rebuild its stocks,” said Abah Ofon, analyst with Standard Chartered Bank in Singapore.
The United States, the world’s biggest cotton exporter, plans to grow just 89% of the cotton it grew last year in 2012, latest figures from the U.S. Department of Agriculture on Friday showed, as prices were unattractive.
Cotton ended 2011 as the worst-performing commodity of the year, falling 37% from 2010 after record prices had boosted output and decimated demand, while a shaky global economy scared off investors.
The benchmark New York cotton future on ICE was down 0.19% at 93.33 cents per lb by 1411 GMT, while spot prices for Shanker-6 cotton on India’s domestic market rose Rs 300 to Rs 34,800 per candy of 356 kg on Friday.