A panel of ministers, headed by finance minister Pranab Mukherjee, is scheduled to meet on April 3 to decide on permitting fresh registration of cotton export contracts, sources said on Thursday.
?The informal GoM (group of ministers) will meet to discuss all aspects of cotton exports and fresh registration,? one of the sources told FE.
The Directorate General of Foreign Trade (DGFT) on March 12 notified the government?s decision to lift a controversial ban on the cotton exports a week after imposing it, following a meeting of the GoM. But it suspended the registration of fresh shipment contracts and also asked traders to revalidate all the registration certificates issued before the ban was imposed on March 5.
Earlier this month, sources said the government would probe allegations of cornering of export licences by a few unscrupulous traders, and the findings were to be submitted with the ministerial panel before a decision on allowing fresh registration is made.
The suspicion of manipulation in licence grabbing intensified after export registration witnessed an unprecedented spurt after mid-February, a development partly responsible for the imposition of the brief ban on cotton exports.
Traders said a whopping three million bales of cotton were registered with the DGFT between February 23 and March 3 for exports. As much as 13 million bales were registered for exports before the ban was imposed, of which a record 9.5 million bales were shipped out. The country had exported around 8 million bales in the year through September 2011.
The ban had triggered protests by key producing states such as Gujarat and Maharashtra, and Union agriculture minister Sharad Pawar who argued farmers? income would dwindle due to a resultant fall in domestic prices.
Domestic cotton prices have held up despite a temporary halt in shipments and a bumper crop, suggesting wide-scale purchases by traders as cash-strapped textile mills are still struggling to stock up. ?Textile mills are buying cotton in small volumes, a sort of hand-to-mouth purchases,? said DK Nair, the secretary general of the Confederation of Indian Textile Industry.
Prices of the popular Shanker 6 variety has risen R1,500 to R34,500 per candy of 356 kilograms each in early trade on Thursday since the DGFT notified the decision to lift the ban. Prior to the latest notification, the prices had declined 6% a candy to R33,000 per candy since the ban was imposed, while global prices jumped 4.5% on March 5 itself responding to the restriction.
The country is expecting a record harvest of 34 million bales of cotton in 2011-12, up from 33.9 million bales last year.