FW: textiles news

 

 

 

By Our Special Correspondent

MUMBAI, DEC. 13—

 

The Group of Ministers

 (Agriculture, Commerce, Finance and Textiles) will meet in capital this week to take a call on the extension of cotton exports. The deadline to ship cotton from the country is 15 December 2010, it may be noted here. The government on 28 September 2010 had permitted exports of 55 lakh bales of raw cotton during the 2010-11 cotton season. The 45-day shipment beginning 01 November 2010 gets over on 15 December 2010. Of the 55 lakh bales, only 25 lakh bales would be exported till the 15 December 2010 deadline and balance 30 lakh bales will remain un-shipped. The government therefore has to decide whether export extension should be given or not?

Reliable industry sources are of the opinion that extension will not be given. And in absence of extension, the cotton prices are expected to decline rapidly on account of increasing cotton arrivals in the country. The total arrival of cotton till 30 November 2010 has been to the order of 72 lakh bales, it may be noted here. On the price front, S-6 which had peaked to the level of Rs. 48000 per candy is now

quoted at Rs. 40500 per candy. And within 15 days, it will reach the level of Rs. 38000 per candy provided cotton exports are kept in abeyance, sources opined.

The downward price trend is imminent. The daily arrivals have surpassed the level of 2.25 lakh bales and this trend is expected to continue during December and January 2010 and will tamper down thereafter. The decline in cotton prices will bring relief to the cotton spinners. The lower cotton prices levels will continue in the long run provided cotton exports are not permitted immediately and are allowed after Jan-end, sources pointed out.

Another important policy decision likely to be taken by GoM will be of releasing additional quantity of cotton for exports. The Agriculture Minister will be pressing for higher cotton quantity for exports. Will the other Ministers, heed to the demand of additional cotton

export quota? The outcome will be keenly awaited by all cotton stakeholders. The decision of cotton export will depend on the cotton production in the country. And the production estimates now being churned out are diverse by the stake holder. While the cotton trade has estimated cotton production at 347 lakh bales, the mill industry forecasts cotton production at 300 lakh bales. Reliable sources informed that untimely rain has had an impact on cotton. The quality has gone down but quantity is not largely affected. The maximum production loss would range between 8-10 lakh bales.

Obviously, the final call on cotton production will be taken by CAB in next meeting.

 

 

[Saurabh Jain]