The central government on Wednesday decided to allow export of additional 10 lakh bales of cotton during the current season, bringing cheers to cotton farmers.
The central government on Wednesday decided to allow export of additional 10 lakh bales of cotton during the current season, bringing cheers to cotton farmers of Gujarat and other states. The decision comes in the wake of a sharp fall in prices in the domestic market.
The decision was taken by an informal group of ministers (GoM), chaired by finance minister Pranab Mukherjee. "We had calculated earlier an exportable surplus of 55 lakh bales which was permitted. The GoM has decided to allow another 10 lakh bales. So, the total exports will be 65 lakh bales (in the current season)," commerce and industry minister Anand Sharma told reporters after the meeting.
The move will push cotton prices northwards, hope cotton farmers in Gujarat, the largest cotton producing state in the country. The government had imposed a quantitative restriction on cotton exports in October, 2010 when prices of the natural fibre had shot up.
However, the prices have witnessed a sharp correction of 38 per cent from April this year. After peaking at Rs.62,500 per candy (356 kg) in March-end in the domestic market, cotton prices have crashed to about Rs.45,000 per candy now.
The restrictions on cotton exports had come in for criticism from farmers' organisations and the Gujarat government. Apart from farmers protests in various parts of the state, chief minister Narendra Modi had written to the prime minister to lift the ban on the exports in view of bumper yield of the crop and its falling prices in domestic market. Even opposition Congress had made the same request to the Centre.
Cotton season runs from October to September.
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