Ban On Export of Cotton Lifted - But with Registration
THE Cotton controversy is getting murkier. As reported in these columns yesterday, the Government finally withdrew the ban on export of cotton, but under certain conditions.
Now the export of cotton is free as per the export policy, but there is a restriction of prior registration of contracts with DGFT.
Time to export (validity of RC) was “30 days from issue of RC”. Because of prohibition imposed by Notification No. 102 (RE-2010)/2009-14 dated 05.03.2012, this time limit may require to be extended in respect of those RCs, that were valid as on 05.03.2012 and for which LEOs are yet to be issued & exports completed. All RCs would need to be submitted to DGFT for scrutiny and revalidation. Exports can be effected only after RCs are revalidated.
Issue of new RCs stands suspended until further orders
The lifting of the ban was not really welcomed. Gujarat chief minister Narendra Modi called it "cheating the farmers of the country". Modi added, “The notification says that the Centre will not give any new registration certificates for export of cotton. Not only that, it would also investigate the export of the commodity earlier, incorporating a clause that the registration, allowed earlier, has to be reinvestigated with no time-frame. This new monitoring system will open doors to corruption.”
Newspapers in USA reported,
1. Cotton futures finished lower Monday for the fifth straight session as the market digested the gyrations major producer India has taken on its cotton exports.
2. Cotton slid early after news that India had lifted its ban on cotton exports. That soon changed when New Delhi said it would ban fresh cotton and allow only quantities that had already been registered for export but have yet shipped.
3. India is the world's No. 2 cotton producer and the biggest exporter after the United States. New Delhi had imposed a ban on cotton exports last Monday. The decision was challenged by India's farm minister and the Indian ministers meeting did not immediately decide on the issue.
4. The outlook for cotton futures, though, is bearish given market fundamentals.
5. No surprise if cotton prices keep falling and drift below 80 cents in the coming months.
DGFT Notification No. 106/(RE-2010)/2009-14, Dated: March 12, 2012