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2011-07-06

DGFT to start cotton export allocation

Even though there is a protest by some exporters

Exporters all over India have been taking objection to the new eligibility criteria set by DGFT for allocation of the quota this time.

DGFT, who may go for the allocation today, in fixing conditions and modalities, has said those seeking to export should have exported during the 2008-9 and 2009-10 seasons (October-September). Allocation is to be made on a pro-rata basis, but an exporter will not get to export more than 25,000 bales (170 kg each). Applicants can seek to export a quantity that is higher than the previous year, subject to the 25,000-bales limit.

Earlier, on June 9, the government notified exports of 1 million bales, in addition to the 5.5 million bales that got exhausted by January 15. The export quota was fixed based on projections that production this season could be a record 32.9 million bales. The Cotton Advisory Board had in February cut the estimate to 31.2 million bales, still a record. While the textiles ministry sees production still lower around 31 million bales, the agriculture ministry has projected 32.9 million bales.

While registration for the additional quota began on June 20 and ended on June 25, applications got processed till July 5 and allocation of quota will be announced tomorrow. Exporters will be given time to present their documents between July 7 and July 15, while shipments will have to be completed by September 15, according to the schedule.

Cotton is among the very few commodities facing stringent measures over and above the norms laid out in the general trade policy.Cotton exports were allowed after the fibre’s prices dropped about 35 per cent since the first week of April to Rs 40,000-41,000 for a candy (356 kg) of the Sankar-6 variety. Though prices increased by 10 per cent after the additional export quota was announced, they have dropped to the previous levels again, on lack of demand. Currently, prices are ruling at Rs 39,500-40,000 a candy.

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