Registration for additional cotton exports quota will begin on Monday. The Directorate-General of Foreign Trade (DGFT) will receive applications for registration of export contracts until June 25.

Applications for registrations will be processed till July 5 and allocation of quota will be announced on July 6.

Exporters will be given time to submit their documents between July 7 and July 15, while shipments will have to be completed by September 15, according the schedule drawn by the DGFT.

However, a public notice issued by the DGFT on the conditions and modalities for registration has irked a section of exporters.

According to the DGFT, those seeking to export should have exported during 2009-10 and 2010-11 seasons (October-September).

Allocation will be made on a pro-rata basis but an exporter will not get to export more than 25,000 bales (170 kg each). Applicants could seek to export a quantity that is higher than the previous year subject to the 25,000 bales limit.

Trade sources said exporters may be allocated the higher quantity they would have shipped in the last two season, not exceeding the cap fixed by the DGFT.

According to an exporter, who did not wish to be identified, the stipulations seem to be loaded in favour of established and big players.

“What about someone who would have exported this season? Going by the rules, an exporter who has shipped cotton this season cannot apply for the additional quota,” he said.

The DGFT, on its part, has come up with a few other conditions too. The notice said failure to export the allocated quantity within the stipulated time could invite penal action.

The exporter could be debarred from further allocation, while a fine that could be over Rs 10,000 and up to four times the value of goods could be levied.

The Centre had on June 9 notified exports of 10 lakh bales of cotton in addition to the 55 lakh bales that got exhausted by January 15.

The export quota was fixed based on projections that cotton production this season could be a record 329 lakh bales. However, the Cotton Advisory Board had in February cut the estimated to 312 lakh bales, still a record. The Textiles Ministry sees the production still lower around 310 lakh bales but the Agriculture Ministry has projected 329 lakh bales output.

Cotton exports were allowed after the fibre's prices have dropped about 35 per cent since April first week to Rs 40,000-41,000 for a candy (356 kg) of Shankar-6 variety.

Though cotton prices increased 10 per cent after the additional export quota was announced, they have dropped to the previous levels again on lack of demand.

Prices are on a downswing as spinning mills have yarn inventories as the textile sector is going through a rough patch now. Though unlimited yarn exports were permitted from April 1, shipments have been meagre due to lack of buyers in the global market.

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