The Ministry of Agriculture has recommended extending cotton exports under the open general licence (OGL) beyond September, following a bumper harvest this season.
“The sowing has been very good. Till date, cotton acreage in the country has gone up to 11.7 million hectares (mh), against 10.6 mh, in the year-ago period — up 10 per cent. Harvest is expected to be good, leading to better price recovery for the farmers. Thus, allowing free exports is the only logical option,” said an official source.
According to informal estimates by the Cotton Corporation of India, which is conducting a preliminary survey of the crop, the acreage may even go up to 12 mh by the end of the sowing season. “Going by acreage, production estimate for the crop may even be more than 35 million bales in the current season,” said an official.
Rice and cotton are two major crops, which have led the recovery in acreage, while laggards include pulses and coarse cereals. Cotton acreage has substantially gone up in Gujarat, Rajasthan and Haryana.
However, the prices (Rs 38,000-39,000 per candy) are subdued compared to last year, since domestic and international demand is low. After a lot of debate over the eligibility criteria for cotton export, the government had decided to free cotton export and bring it under OGL scheme following good supply and falling domestic prices earlier this month.
The Directorate General of Foreign Trade (DGFT) has done away with the eligibility criteria for a cotton exporters. However, the guidelines will require exporters to submit documentary proof of shipments and will continue to have penal clauses in case the licensee fails to export cotton after registering for the same.
During the hearing of a petition, the Bombay High Court had ordered DGFT to extend the quota allocation process to August 8, which was over on July 15. DGFT has challenged the high court order before the Supreme Court.
