The allocation of export quota to 227 applicants for an additional one million bales (170,000 million tonnes) of cotton was announced late last evening by the Director General of Foreign Trade (DGFT).
Of the 581 applications received, 227 were shortlisted as eligible and have been allocated 158,460 mt of cotton on pro-rata basis. According to the DGFT trader notice, 8,200 mt has been sequestered in obedience to interim orders of various High Courts for the list of 82 writ petitioners and 3,339.2 mt sequestered in obedience to interim orders of the Calcutta High Court for the list of two writ petitioners.
The DGFT public notice says once the final orders are received, further action will be taken either to allot them according to High Court orders or allot the quantity (or the balance quantity, as the case may be) among the two public sector applicants, namely Cotton Corporation of India (CCI) and Minerals and Metals Trading Corporation (MMTC). Such contingent allotment becomes necessary because the government has mandated export of these additional 1 million bales in the current cotton year and neither would there be time to go through another round of allocation by inviting fresh applications nor would such a small quantity be commercially viable for a fresh round of allocation.
Exporters now have only seven working days to conclude the deal, open the LC and acquire the hard copy, as the last date for registration is July 15.
According to Vinod Ahuja, director, VRA Cotton Mills, global buyers have lost confidence in Indian suppliers of cotton due to unstable export policy, so the export is going to be challenging.
The last date decided for the shipment is September 15.
The President of All Gujarat Ginners Association, Dilip Bhai Patel, said seven million bales are unsold in India, so this quantity of one million bales is insufficient and cotton export should be put under open general licence (OGL).
Cotton traders across India are feeling shaky over the consistent fall in prices. “The prices of Shankar-6 are around Rs 36,000 a candy (356 kg) and are likely to drop to Rs 30,000 a candy by the month-end. This will have severe repercussions on the crop that will start arriving in October”.
Ginners are leaving no stone unturned to persuade the government to allow them to export their surplus stock (at least 2 million bales) to make room for the 2011 crop.
With a reshuffle in the Union Cabinet expected shortly, the textile lobby is hoping to get a new minister, to draft policies that suits the needs of industry.
The free trade of cotton and cotton yarn, according to the industry, is the need of the hour to give India an edge in the global market.
