The Government has allowed fresh registrations from interested exporters for cotton export. However, it has not fixed any quota for the export.
Mr Anand Sharma, the Commerce and Industry Minister said: “We have lifted the suspension of fresh registrations for exports and accordingly, the Directorate General of Foreign Trade (DGFT) will take the necessary steps.”
This decision was taken at a meeting of the Finance Minister, Mr Pranab Mukherjee; the Agriculture Minister, Mr Sharad Pawar; Chairman of the Prime Minister’s Economic Advisory Council, Dr C, Rangarajan, and Mr Sharma.
“We have to see that demand of domestic industry for cotton is met. The textile sector directly or indirectly provides employment to 105 million people in this country. The handloom sector also employs a large number of people, particularly, the weaker section of the society. Therefore, a balanced view had to be taken. The Group of Ministers will make a fresh assessment in three weeks time,” Mr Sharma added.
It has also been decided that the Cotton Corporation will build a buffer stock of 10 lakh bales (of 170 kg each) to meet any exigency during the months of June, July and August 2012.
Last month, the Government had lifted the ban on exports but decided not to issue fresh registration certificates (RCs). It only allowed shipments for which RCs were already issued before the ban was imposed on March 5.
Mr Sharma said the Government has not fixed any ceiling on cotton exports but will review the situation every two weeks. Exports were allowed after both the Agriculture Ministry and the Cotton Advisory Board, under the textile ministry, raised output estimates.
The Agriculture Ministry has pegged cotton output for the 2011-12 season ending September at 35.2 million bales, while the Cotton Advisory Board estimates output at 34.7 million bales. Last year, farmers had harvested an estimated 33.9 million bales of cotton and exported 7.8 million bales. In the current season so far, 11.5 million bales have been exported. The Government on, March 5, had imposed a blanket ban on export of cotton on the grounds that the total export registrations had topped 12 million bales, almost half of the total arrivals in the market, but later softened its stand to allow export of registered contracts after scrutiny.
Monday’s decision comes against the backdrop of Mr Pawar writing to the Prime Minister objecting to the Government’s export policies towards certain farm items like cotton, sugar and milk.
Congress MPs from Gujarat led by Mr Ahmed Patel, Political Secretary to UPA Chairperson Ms Sonia Gandhi, and State Pradesh Congress chief, Mr Arjun Modhwadia, recently met the Prime Minister, Dr Manmohan Singh; the Finance Minister, Mr Pranab Mukherjee and Mr Sharma and sought the removal of restrictions on cotton exports.