The Government’s move to hike registration limits for cotton exports to 30,000 bales may help boost the fibre shipments.

Cotton exports are under open general license and the move to hike registration limits comes ahead of the likely announcement of import quota by China, a large consumer.

“We expect some pick-up in demand by end December, as China is expected to announce its import quota soon,” said M.B. Lal, Managing Director of Shail Exports Pvt Ltd.

The Director General of Foreign Trade recently modified the condition for cotton exports and increased the maximum limit for obtaining the registration certificates (RCs) to 30,000 bales from 10,000 bales earlier.

Lal, the former Chairman of Cotton Corporation of India, said China was expected to announce its import quota sometime later this month or in early January.

The rise in export registration limits may possibly help boost the prices of cotton, which are largely hovering around the minimum support price (MSP) level of Rs 3,900 a quintal. The Government has procured about two million quintals through its procurement programme at MSP.

Trade sources said the hike in RC limit may not help the exporters significantly as global demand was weak. The hike in export registration limits was unlikely to alter the domestic availability for local mills, said D.K. Nair, Secretary-General, Confederation of Indian Textiles Industry.

Nair estimated that the Indian exporters have contracted some 15 lakh bales so far, of which about half the quantity would have been shipped out. According to the Commerce Ministry, the export registrations stood at 4.5 lakh bales as of November 5.

Lal expected India’s cotton exports to be not more than eight million bales, against 12.9 million bales shipped out last year. The Cotton Corporation of India has estimated production of 33.4 lakh bales, pegging the domestic consumption at 26 lakh bales, leaving an exportable surplus of seven million bales.

> Vishwanath.kulkarni@thehindu.co.in