The postponement of registration for exports of cotton (now October 1) has helped to arrest its prices. These have dropped to Rs 3,700 per maund (37.324 kg) from Rs 4,000 per maund after the announcement.
A meeting of the Union ministries of commerce, agriculture and textiles scheduled for September 14 to address the issue of whether exports should be deferred till December due to a delayed harvest has been postponed to September 27.
Textile mill associations across India have been working hard to persuade policymakers to restrict the export. India has a carryover stock of four million bales (a bale is 170 kg) this year as compared to 7.1 million bales at this time last year.
Millers are halting production at many places due to supply constraints and unviable prices. The lesser opening stock, coupled with late arrivals as a result of late withdrawal of monsoon in Punjab, Haryana, Gujarat and Andhra Pradesh, has put textile companies under a squeeze. The Cotton Advisory Councilís estimate of the cotton crop this year is 32.5 million bales. The anticipated domestic demand is 26.6 million bales. Insiders in the trade said it was premature to give an estimate of crop, as the monsoon has not withdrawn yet in most parts. If rains discontinue, we may achieve the estimated target of crop. Authentic estimates can be drawn only after mid-October, when the harvest starts.
Irrespective of the crop yield, the prices are likely to remain firm and this curtails the role of state agencies which procure at the minimum support price. The Chairman and Managing Director of Cotton Corporation of India, S C Grover, said that contrary to 2008-09, when they had a lot to do, he expects minimum intervention by CCI, as the prices are likely to remain higher than MSP.