Union Government lifted Restriction on Cotton Export & permitted Shipments under OGL

The Union government on 31 July 2011 announced the lifting of restriction on cotton export and permitted shipments under the open general licence (OGL) for the rest of the current cotton season. The government announced a new marble import policy, increasing the limit on the quantity to be imported from 300000 tonnes to 500000 tonnes. The eligibility criteria were also modified so that more people become eligible for licence. These decisions were taken following a review meeting between the Commerce and Industry Minister Anand Sharma and the Secretaries of the Commerce, Textiles and Agriculture Ministries.

The cotton season runs from October to September. In the remaining two months of the 2010-11 cotton season exporters will only have to register with the directorate general of foreign trade (DGFT)) to send shipments. They will be free to export any quantity they want.

 The government had placed a cap on cotton exports at 55 lakh bales (170 kg each) in October 2010 to check spiralling prices and ensure availability of the raw material for the domestic textiles industry.

Prices declined to about Rs. 31000 a candy (356 kg) in July 2011 from the peak of Rs. 62,500 in March-end 2011. The restrictions on cotton yarn were removed from 1 April after the manufacturers found themselves saddled with big inventories following the curbs on exports.

Estimates of the Cotton Advisory Board (CAB) put cotton surplus at the end of the current season as 52.5 lakh bales on account of lower industry demand. The CAB estimate was 27.5 lakh bales in February 2011.

The projection for domestic consumption this season was lowered to 236 lakh bales, against the earlier estimate of 265 lakh bales, on account of high inventories.