To arrest price rise, duty also on waste exports.
In order to check the rise in prices of raw cotton in the domestic market, the government of India has imposed a duty on the export of the commodity. Apart from this, the Centre has also decided to levy a 3 per cent duty on cotton waste exports.
“An export duty of Rs 2,500 a tonne will be imposed on all varieties of raw cotton with effect from April 9. Moreover, a duty of 3 per cent on the cotton waste exports will be effective from the same date,” said sources in the textile ministry.
The government has been taking measures to ease prices. Last week, the Centre suspended the duty concession of 7.67 per cent available to cotton yarn exporters under the Duty Entitlement Pass Book (DEPB) scheme.
Around 79 lakh bales of cotton have been registered with the textile commissioner so far and 55 million bales have already been shipped to Hong Kong, China, Pakistan and Bangladesh. Now, with the exports duty in place and strengthening rupee, there will be less incentives to export cotton. The latest move by the government to curb skyrocketing prices in the domestic market has already started yielding results.
“The price of benchmark Shankar-6 variety in Gujarat has fallen to Rs 28,000 to Rs 28,600 a candy from a peak of Rs 29,300 to Rs 29,400 a candy a few days back,” said Kishor Shah of the Central Gujarat Cotton Dealers Association (CGCDA).
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According to industry estimates, raw cotton prices in the domestic market have firmed up by around 35 per cent due to low supplies globally. At the onset of the current cotton marketing year (October-September), the prices of Shankar-6 cotton were hovering around Rs 21,000-22,000 a candy.
Concerned over the spiralling prices of raw cotton, apex industry bodies such as the Southern India Mills’ Association (Sima) and the Confederation of Indian Textile Industry (Citi) had demanded a ban on cotton exports from India.
According to traders, US, Brazil and Pakistan have no surplus cotton, while China’s cotton acreage has dipped 10 per cent this year.
“India has emerged as a lucrative destination for cotton procurement,” Kishor Shah added. Cotton Advisory Board (CAB) has estimated cotton crop at 292 lakh bales for 2009-10.