"We have requested the Ministry of Commerce and Ministry of Finance to initiate registration of forward export contracts for raw cotton with the Textile Commissionerate," said D K Nair, secretary general of CITI.
The confederation believes the move will help monitor and, if need be, take policy decisions in restricting exports to a certain limit. "While there are central government agencies monitoring the raw cotton exports, there is no mechanism to monitor exports in advance even as the forward contracts are being signed," added Nair.
The request comes at a time when the Cotton Advisory Board (CAB) is in the process of revising the export estimates of raw cotton from 85 lakh bales to 100 lakh bales in 2008. "The industry has asked the ministry to have some control over raw cotton supply in the country. Usually, cotton exports are registered only when they are actually shipped.
A forward contract registration mechanism will help us gauge the excess or shortage in exports and suggest necessary policy decisions accordingly," said J N Singh, textiles commissioner and joint secretary in Ministry of Textiles.
Limit for such exports will depend on the domestic supply situation and may vary from time to time, said Nair.
Apparently, the domestic players require around 241 lakh cotton bales but have been reeling under rising cotton prices. For instance, price of Shankar 6, a variety of cotton which was at around Rs 18,000 per candy in the beginning of the year now hovers close to Rs 30,000 per candy.
Earlier, textile mills associations across the country had gone on strike on July 9 to force the government in slashing the 14 per cent import duty as well as one per cent drawback on exports on cotton.
