The government should allow further exports of cotton for the benefit farmers who are currently holding large stocks, the Cotton Association of India (CAI) has said.
On March 12, the government lifted the ban on cotton exports, which was imposed on March 5, but decided not to issue fresh permits for exports. Before the ban, the Commerce Ministry had issued registration certificates for 130 lakh bales (of 170 kg each), of which 95 lakh bales had already been exported.
"We urge the government to open registration of further quantities for export and make the export of cotton free under OGL without any quantitative and other restrictions with immediate effect," the association said in a statement.
Urging Prime Minister Manmohan Singh to free cotton exports immediately, it said the move will benefit farmers the most, as a sizeable quantity of cotton is still in the their hands and is yet to arrive in the market.
Due to the fall in the prices as a result of this ban, farmers are losing heavily. It is over a one month since the export of further quantities of cotton has not been allowed, the CAI said.
"Though Indian mills had the option of entering the market, they have not done so in a big way, despite the cotton prices being lower than before, thereby giving no support to the cotton prices," Cotton Association of India President Dhiren N Sheth said.
In case of need later on in the season, the spinning mills have the option of importing duty free cotton. It has happened in the past not several years ago, when almost 15 per cent of the total cotton production of the country was imported by the mills for several years in succession, Sheth said.
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It is extremely unlikely that even half of such an import figure will be required to be reached this season. Australian, Brazilian and East African cotton is expected to be available in abundance, he added.
Even during the years when India was a net cotton deficit country, cotton exports were always kept under Open General Licence (OGL). However, it is ironical that in the years of surplus availability of cotton, export is meted out with restrictive policies now.