Govt restricts raw cotton exports to cool prices .

NEW DELHI: The government has restricted exports of raw cotton to cool prices of the fibre in the domestic market.

The Textiles Ministry has suspended the mandatory pre-shipment registration of raw cotton and cotton waste indefinitely.

"Pursuant to the inter-ministerial meeting on steep increase in prices of cotton, the government has decided that the registration of export contracts prior to shipment of raw cotton...shall now be suspended with effect from April 19, 2010, till further orders," the ministry said in a statement.

The move is aimed at controlling the rising prices of cotton in the domestic market, an official said.

Raw cotton prices are ruling at about Rs 28,300 per candy (356 kg) from Rs 22,000 per candy last October.

However, the restrictions won't imply on cotton already registered for exports. For the first few months of the current cotton season (October-September), about 80 lakh bales have been registered for exports with the Textiles Commissioner, sources said.

The domestic textile industry has been pitching for cotton export restrictions in the wake of a steep rise in prices of the natural fibre.

India, the world's second largest cotton producer, exported 2.36 million bales (of 170 kg each) of cotton last season.

Earlier, the government had imposed a duty of Rs 2,500 per tonne on raw cotton exports, besides, a three per cent duty on export of cotton waste.

On July 22, 2008, the Directorate General of Foreign Trade (DGFT) had made it mandatory to register contracts for cotton exports with the Textiles Commissioner.

Source : The Economic Times