Mumbai: India, the world’s second-biggest producer of cotton, will give exporters more time to ship an alloted 5.5 million bales after they missed this total by a 15 December deadline, two government sources said.
“Considering the domestic availability of cotton we have decided to give exporters additional time,” said a source at the textile ministry, who declined to be named, speaking on Sunday.
India, also the world’s second biggest exporter of the fibre, had allowed exports of 5.5 million bales from 1 November to 15 December, but exporters failed to ship the entire quantity after unseasonal rains delayed arrivals in the spot market.
Overseas demand for Indian cotton has increased after bad weather hit crops in China and Pakistan, both leading consumers.
India is likely to produce more than 32.5 million bales of cotton in 2010/11, higher than last year’s 29.5 million bales, industry and government officials have said. Exports so far have been around half the allowed amount after unseasonal rains hit supply and quality.
“We don’t know out of 5.5 million bales how much cotton has been exported. After collecting data from exporters we will decide about the extra time needed to be given to them,” the ministry source said.
Domestic cotton arrivals at Indian spot markets have now picked up after drier weather in December and so far in the 2010/11 season have risen 2.3% over a year ago, a senior government official said on 14 December.
Exporters will now have to register with another government body, however.
“The exporters will have to register contracts with Directorate General of Foreign Trade (DGFT) before exports,” said a source at the textile commissioner’s office.
Previously, exporters only had to register with the textile commissioner and the new requirement could lead to delays in the export process.
At 10:30 am, the New York cotton futures contract was up 2.18% at $1.5340 per lb, after hitting a record high of $1.5412 earlier in the day.