Govt Clears Import Of 10 Lakh Bales Of Cotton

The Union textile ministry has allowed the Cotton Corporation of India to import 10 lakh bales of cotton during '02-03 season (October-September), in view of the shortage of cotton in the domestic market. 

This is for the first time that the CCI has been allowed to import such large quantities of cotton to meet domestic demand. CCI, which originally had the mandate to canalise cotton imports, had, in fact, not carried out any major imports for over a decade, except perhaps for a few hundred bales every year for the National Textile Corporation.

The country, on the other hand, freed cotton exports from quantitative restrictions a couple of years ago, with definite surplus in the domestic market for the past few years.

Government sources said the permission to import 10 lakh bales of cotton has been given to CCI in keeping with the buffer import concept.

CCI would import cotton with a back-to-back tie-up to mitigate risk of over-imports, the sources said. An attempt would be made by the corporation to bring down the rising prices of cotton.

Cotton prices have been rising inexorably for the last few months in the global market mainly due to a drastic fall in production in Australia and rising offtake of cotton vis-a-vis man-made fibres like polyester. Domestic cotton prices have shown an year-to-year increase of 25-50% since February last.

Prices of major varieties — Sankar-6/4 (Gujarat) and DCH-32 (Karnataka) — have increased from Rs 16,895 and Rs 27,400 per candy in February '02 to Rs 22,600 and Rs 34,390 per candy respectively in February '03.

The Cotton Advisory Board has already lowered production estimates for the current season to 152 lakh bales of 170 kg each as against production of 158 lakh bales in the previous season. Consumption during the current season has been projected at 179 lakh bales, compared to the revised estimate of 171.7 lakh bales in the year-ago season.

With the buoyancy in textile industry since the '02-03 Budget, mill consumption is expected to rise from 147 lakh bales last season to 153 lakh bales in the current season. Cotton is being imported into the country mainly from US, West Africa, Egypt and the CIS countries.