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The Cabinet Committee on Economic Affairs (CCEA) today approved a proposal for export of 20 lakh bales of cotton by the CCI for the cotton season 2004-05.
The scheme would provide cost neutralization to the Indian cotton exporters to make exports competitive.
This year bumper cotton crop – globally, including in India, has resulted in downward prices from the beginning of the cotton season. According to the latest estimates released by the Cotton Advisory Board (CAB), the current year’s total cotton production is likely to be 213 bales. The opening stock during the current cotton season was 21 lakh bales, and about 5 lakh bales are likely to be imported under the advance licensing for mandated production. Thus the total availability of cotton during the current year would be 239 lakh bales. The total domestic consumption (excluding export) is expected to be around 193 lakh bales. This would leave a surplus of about 46 lakh bales. In order to improve the sentiments in cotton prices, it would be desirable to export about 20-25 lakh bales during the current cotton year. The main markets for Indian cotton exports would be Bangladesh, China, Indonesia, Taiwan, Thailand and to a certain extent - Pakistan. Though the quality of Indian cotton is acceptable in the international prices for South East Asian destinations are slightly lower than the Indian CIF prices for the same destinations.
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