Indian cotton export falls short as the deadline passes by

16 Dec '10

4 min read

Rough estimate is that India's export as of December 15, 2010 is 25-30 lakh bales (2.5-3 million bales). Each Indian bale consists of 170 kg. December 15th was the deadline for cotton exporters to physically ship the allowable limit of 5.5 million bales.

Government of India has set the export limit of 5.5 million bales allowing the physical shipment from November 1, 2010. Exporters are allowed to export with an approved Export Authorization Registration Certificate (EARC). Shipment period is restricted to 45 days from the date of issue of EARC by the government or December 15th, whichever is later. From sources, it is clear that the target export limit of 5.5 million bales has not been reached by the December 15th deadline.

As of December 16, 2010 (8.00 hrs IST), Government of India has issued EARC for 50 lakhs 23 thousand 1 hundred and 40 bales (roughly 5.02 million bales of 170 kg each). The government has rejected the export registration for 2 lakhs 72 thousand and 720 bales (roughly 0.27 million bales of 170 kg each). Per an official notification from the Office of the Textile Commissioner, India dated September 30th; the deadline for the shipment of the allowed 5.02 million bales was December 15th. Although, it will take a few weeks to know the actual exported amount, estimates are that 2.5 to 3 million bales would have been shipped by the December deadline. This leaves a shortfall of 2.5 to 3 million bales per the allowable maximum limit of 5.5 million bales.

While speaking with this reporter from Mumbai of December 15th, Mr. Subhash Grover, Chairman and the Managing Director of Cotton Corporation of India agrees with the rough estimate of the cotton exported as of December 15th. Mr. Nayan Mirani of Khimji Visram and Sons, Mumbai, who is also the Vice President of Cotton Association of India in speaking to Seshadri Ramkumar on December 15th also agrees with the exported cotton amount to be about 2.5 to 3 million bales. However, he emphasized that this estimate is his personal estimate and does not reflect Cotton Association's estimate.

Mr. A. B. Joshi, Textile Commissioner, Government of India in a telephone conversation with Seshadri Ramkumar on the late afternoon of December 15th from Mumbai clarified about the situation with regard to government's decision on the export of remaining bales.

He advised that until the government receives the actual shipment data from ports, the government will not be in a position to make any decision. The exporters have 21 days from the actual shipment of cotton to report the exact shipment data to the government. Therefore, it will be first week in January 2011 to get actual verifiable shipment data. The data has to be compiled so that the meeting of Central Ministers of the departments of Agriculture, Textiles, Commerce and Finance can convene to make a decision. This ministerial group will be making the decision on export and looks like it will be the end of January 2011 when such a decision from India can be made.

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