Mumbai, April 5 The five per cent duty incentive and rupee depreciation against the dollar seem to have revived cotton exports in the last three months.
Of the total cotton exports of 9.5 lakh bales till March 31, about 5.97 lakh bales have been shipped in the first quarter of the calendar year 2009, according to data provided by the Textile Commissioner’s Office, Mumbai. Traders have registered to export 13.06 lakh bales with the Textile Commissioner, Mumbai.
(It is mandatory for exporters to register the details of export order with the Textile Commissioner.)
As part of the stimulus package, the Centre has announced five per cent duty credit for raw cotton with effect from April 1, 2008 and the benefit was made available for all cotton exports till July 1, 2009.
Despite the Government sops, industry insiders are pessimistic of achieving the export target of 50 lakh bales against 80 lakh bales exported last year.
Price parity
“With the depreciation of rupee, we are now closer to achieving price parity between Indian and global prices. But the global demand is still weak. I do not think we can reach the export target by July (the end of cotton season 2008-09),” said a Mumbai-based exporter.
Mr S.C. Grover, Chairman and Managing Director, Cotton Corporation of India (CCI), said, if one adds the logistic cost and other expenses, there is still a disparity of 3-5 cents between international and domestic prices.
As the MSP procurement by both CCI and NAFED is almost coming to an end, prices in the domestic markets have come down in the last two months, but with the demand in the domestic market picking, prices have started inching up of late.
Shankar-6 prices have fallen from a high of Rs 22,200 a candy in November to Rs 20,600 in February.
The average Cotlook A index fell from 57.70 US cents (USC) a pound in January to 55.20 USC in February and slipped further to 50.75 USC in March.
Source : Business Line