The government today relaxed export norms for cotton and cotton yarn, doing away with the need to register contracts, to help boost outbound shipments of the commodity.
In a notification, Director General of Foreign Trade (DGFT) said the registration requirement for export contracts of cotton and cotton yarn “has been dispensed with“.
The move is likely to help stabilise domestic cotton prices, which have fallen below the minimum support price (MSP) in some producing states due to sluggish export demand and bumper domestic production this year.
According to the USDA report, India — the world’s second—biggest producer of cotton — is likely to export 7.69 million bales of the fibre in 2014—15 marketing year (August— July), down by 35 per cent from last year due to sluggish demand from China.
China is the top cotton export market for India, followed by Bangladesh and Pakistan.
Before easing export norms, the Centre had asked the Cotton Corporation of India to procure cotton from farmers in 11 states as the rates have fallen below the MSP in Andhra Pradesh, Telangana and Maharashtra.
“During the current cotton season 2014—15, prices of cotton are below MSP in the states of Andhra Pradesh, Telangana and Maharashtra,” Minister of State for Agriculture Mohanbhai Kundaria had said in a written reply to the Lok Sabha recently.
CCI has initiated action for procurement of cotton from growers at MSP in 341 centres located in 92 districts in 11 cotton growing states, he had said.
CCI is the government’s nodal agency for procuring cotton at MSP, which is currently Rs 4,050/quintal for long staple.