The critical meeting of the Group of Ministers (GoM) to review the ban on export of cotton remained "inconclusive" on Friday and would consider the issue thoroughly in the coming days before coming to a decision. The ban on export of cotton will continue till then.
Commerce, Industry and Textiles Minister, Anand Sharma said that another meeting of the GoM could be held tomorrow to take further the discussions on the issue. Mr. Sharma has maintained that textile mills were carrying their lowest ever stocks in the past decade and the decision was taken on the advice of the Cotton Advisory Board.
The GoM headed by Finance Minister, Pranab Mukherjee was of the view that further view on the issue needs to be taken before taking a call on the ban. The meeting was attended among others by the Agriculture Minister, Sharad Pawar and Mr. Sharma who is in the eye of the storm. The Prime Minister, Manmohan Singh had on March 7 intervened and directed the GoM to take an urgent review of the decision after Mr. Pawar protested and complained to Dr. Singh that he had not been consulted on the issue and asserted that the ban was not in the interest of the farmers.
The Chief Ministers of Maharashtra and Gujarat as well as the Congress units of these States have protested against the decision to ban the cotton exports and demanded a review of the decision.
The Commerce Ministry came out with a clarification on Friday on the ban stating that the consignments for which export orders have been issued till March 4 would not be affected by the move. The DGFT, which is under the Commerce Ministry, had issued a notification on March 5 banning cotton exports. It had also prohibited export against registration certificates already issued.
"Consignments for which Let Export Orders (LEOs) have been issued till 2400 hours on Sunday, March 4, 2012 will be outside the purview of notification dated March 5 regarding ban on cotton exports," an amended DGFT circular issued here said.
The Textile Ministry had stated that the ban was imposed after taking into account the trend of domestic consumption and depletion of domestic availability. Explaining the reasons behind export ban, the Ministry had stated that the country has already shipped 10 lakh bales more than the exportable surplus, reducing the domestic availability.
It said almost 94 lakh bales (170 Kg each) have already shipped out, against an estimated export surplus of 84 lakh bales. It feared that exports could have reached 100 lakh bales by mid-March with registration of export contracts touching 120 lakh bales so far.