The informal Group of Ministers (GoM) is likely to meet on June 2 to take a decision on the issue of increasing the limit of cotton exports from the current 5.5 million bales for the current season.
The group comprises Finance Minister Pranab Mukherjee, Union Agriculture Minister Sharad Pawar, Commerce and Industry Minister Anand Sharma and Union Textiles Minister Dayanidhi Maran.
The GoM is expected to review the current situation especially in view of the recent shut-down by the textiles units to protest against the declining prices of yarn. The Ministers will take a close look at the cotton exports limit as there is demand from farmers and ginning industry for increasing shipments of the natural fibre. The cotton season runs from October to September.
Additional exports
The Agriculture Ministry has favoured allowing additional exports of the natural fibre beyond 5.5 million bales (170 Kg each). Similarly, the Textiles Ministry is in favour of revisiting the cap on natural fibre exports for the current season.
The group of ministers is expected to meet and sort out the differences among various Ministries as they have come out with different estimates on the production.
While cotton output has been pegged at 33.9 million bales for the current season by the Agriculture Ministry, the Textiles Ministry has forecast a production of 31.2 million bales. Earlier, the government had allowed export of only 5.5 million bales of cotton in 2010-11 and the limit has been exhausted by the exporters.
The ceiling on cotton exports was imposed in October last in the wake of a sharp rise in prices of the commodity hitting the domestic textiles industry. The apparel units had even resorted to partial closures as raw material prices went up.
However, the situation has taken almost a U-turn since March-end and prices of the natural fibre have shown a drastic fall.
