Cotton Association demands removal of ban on cotton exports

“We urge the government to open registration of further quantities for export and make the export of cotton free under OGL without any quantitative and other restrictions with immediate effect,” the Cotton Association of India said

The government should allow further exports of cotton for the benefit farmers who are currently holding large stocks, the Cotton Association of India (CAI) has said.

On 12 March 2012, the government lifted the ban on cotton exports, which was imposed on 5 March 2012, but decided not to issue fresh permits for exports. Before the ban, the Commerce Ministry had issued registration certificates for 130 lakh bales (of 170 kg each), of which 95 lakh bales had already been exported.

“We urge the government to open registration of further quantities for export and make the export of cotton free under OGL without any quantitative and other restrictions with immediate effect,” the association said in a statement.

Urging Prime Minister Manmohan Singh to free cotton exports immediately, it said the move will benefit farmers the most, as a sizeable quantity of cotton is still in the their hands and is yet to arrive in the market.

Due to the fall in the prices as a result of this ban, farmers are losing heavily. It is over a one month since the export of further quantities of cotton has not been allowed, the CAI said.

“Though Indian mills had the option of entering the market, they have not done so in a big way, despite the cotton prices being lower than before, thereby giving no support to the cotton prices,” Cotton Association of India president Dhiren N Sheth said.

In case of need later on in the season, the spinning mills have the option of importing duty free cotton. It has happened in the past not several years ago, when almost 15% of the total cotton production of the country was imported by the mills for several years in succession, Sheth said.

It is extremely unlikely that even half of such an import figure will be required to be reached this season. Australian, Brazilian and East African cotton is expected to be available in abundance, he added.

Even during the years when India was a net cotton deficit country, cotton exports were always kept under Open General Licence (OGL). However, it is ironical that in the years of surplus availability of cotton, export is meted out with restrictive policies now.

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Revamp provisions of forward, option contracts: Assocham

“The legal regime governing forward and option contracts in securities of Indian companies is archaic and needs immediate revamping for a healthy financial sector,” Assocham said

Industry body Assocham asked the government to revamp provisions of forward and option contracts in securities to boost the financial sector of the country.

“The legal regime governing forward and option contracts in securities of Indian companies is archaic and needs immediate revamping for a healthy financial sector,” it said. It asked to allow genuine non-speculative contracts like forwards, buybacks, right of first refusal and pre-emptive rights in commercial agreements.

“...speculation is not considered bad anymore as it not only provides liquidity and price discovery in the market but often offers trades on the other side of hedgers,” it argued. It said that most trades in secondary market ‘particularly exchange-traded futures’ can be categorised as speculative.

The chamber said that shareholder contracts are speculative in nature as they are based on commercial underlying and consideration, allocating real world rights.

“Prohibiting such non-speculative contracts is unintended and literally renders millions of investment agreements, private equity deals, joint venture agreements and other commercial contracts partially illegal,” it added.

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SEBI to open 5 new local offices in FY13

SEBI’s new offices will be located at Chandigarh, Jaipur, Indore, Patna or Bhubaneshwar and Bangalore or Kochi

With an aim to take its services at the door-step of investors, the Securities and Exchange Board of India (SEBI) has decided to open five more local offices, including at Chandigarh and Jaipur, in the current fiscal.

As part of its decentralisation of work to regional offices, the Mumbai-headquartered SEBI is opening new local offices in different regions of the country.

The five new offices will be opened at Chandigarh, Raipur, Indore, Patna or Bhubaneswar and Bangalore or Kochi in 2012-13, according to an official document.

These offices have been "identified inter-alia" on the basis of number of demat accounts, registered folios, exchange trading terminals and rate of growth in beneficiary accounts. The idea behind new offices is to deepen of securities market.

The market regulator had decided to open a new Western Regional Office-I at Mumbai and three local offices at Hyderabad, Gujarat and Luck now in 2011-12. It has identified office buildings and "further work is in progress", it said.

The SEBI board in March 2011 had asked the regulator to explore scope of strengthening its regional offices. Following the board decision, a series of internal discussions took place to explore the possibility of decentralisation of work to regional offices and opening of offices at new places.

During the discussions, it emerged that the investor should get the services of SEBI at his door step to promote a balanced, pan-Indian securities market. As per the regulator, physical proximity of SEBI office to investors and intermediaries would promote deepening and broadening of the securities market.

 

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