Ruling out any kind of restrictions, Commerce Ministry on Friday indicated that it would allow exports of cotton under the Open General License (OGL) for the next crop season beginning October. India is the world's second largest cotton producer.
Under OGL
“Yes, it will be under the Open General Licence (OGL) for the next cotton season,'' Commerce Secretary Rahul Khullar told reporters here. The cotton season runs from October to September.
The decision to continue with the OGL regime was taken after inter-Ministerial consultations between the Finance, Commerce and Agriculture ministries in the last two days.
Domestic consumption
Against the estimated domestic consumption of 26.4 million bales, production is pegged at 35.5 million bales next season, against 32.5 million bales in the current season, leaving room for exports, according to the Cotton Advisory Board (CAB). Exports were put on the restricted route early in the current season.
The initial ceiling of 5.5 million bales was enhanced by one million bales later. Export curbs were imposed after the domestic textiles industry, hit by high commodity prices, had exerted pressure on the government to step in.
However, the move had come in for a sharp criticism from the Agriculture Ministry as also several chief ministers, including Gujarat Chief Minister Narendra Modi. Finally, the government removed the export restrictions last month and put cotton on the OGL. After reaching a peak of about Rs.64,000 a candy (350 kg) in March, prices crashed to Rs.31,000 in July.
The prices have since been stabilised at about Rs.38,000, according to the Confederation of Indian Textile Industry.
