According to the estimates of the Cotton Advisory Board (CAB), the cotton surplus at the end of the current season would be 52.5 lakh bales on account of lower industry demand. In February, the CAB had estimated it at 27.5 lakh bales
New Delhi: Amid abundant availability and a crash in prices, the government on Sunday removed restrictions on the export of cotton and permitted shipments under open general licences (OGL) for the remainder of the current season, reports PTI.
The cotton season runs from October to September. Cotton exports for the remaining two months (August and September) have now been put under OGL, commerce secretary Rahul Khullar told PTI.
"Now, exporters only have to register with the Directorate General of Foreign Trade (DGFT)," he said.
The issue came in for review at a meeting of secretaries in the ministries of commerce, textiles and agriculture, convened by commerce and industries minister Anand Sharma here last week.
In October last year, the government had capped cotton exports at 55 lakh bales (170 kg each) to protect the domestic textiles industry in the face of rising raw material prices.
An additional 10 lakh bales were permitted for export in June, after prices had corrected sharply.
Prices have declined to about Rs31,000 per candy (356 kg) now from the peak of Rs62,500 per candy in March-end.
The restrictions on cotton yarn were removed from 1st April after the manufacturers found themselves saddled with big inventories following the curbs on exports.
Besides the changing dynamics in the market, administering the restriction has proven to be 'a big headache; for the commerce ministry, especially after the recent allocation of 10 lakh bales, as some exporters have taken the issue to different courts, sources told PTI.
They said it was in this context that Mr Sharma reviewed the situation with the three secretaries over the weekend.
According to the estimates of the Cotton Advisory Board (CAB), the cotton surplus at the end of the current season would be 52.5 lakh bales on account of lower industry demand. In February, the CAB had estimated it at 27.5 lakh bales.
Likewise, the projection for domestic consumption of cotton this season has been lowered to 236 lakh bales, as against the earlier estimate of 265 lakh bales, on account of high inventories.
The cotton production projection, however, has been increased to 325 lakh bales for the current season.
Commenting on the decision, Confederation of Indian Textile Industry (CITI) secretary general DK Nair said: "It would have been better if the government could have allowed controlled exports...because cotton consumption in the country is low...nobody knows what will be the market condition in the coming months."
Commenting on the slowdown, Leif Eskesen, chief economist for India & ASEAN at HSBC said: "These numbers confirm that inflation pressures remain firmly in place despite the ongoing moderation in growth. The RBI will, therefore, have to maintain its tightening bias for a while still to anchor inflation expectations."
The HSBC factory Purchase Managers' Index (PMI), a headline index to measure the country's factory output, slipped to the lowest in 20 months at 53.6 in July from 55.3 in June. The latest fall in the index was the third in successive survey periods, led by a slowdown in new order growth. However, July's reading pointed to a further strengthening of business conditions in the Indian manufacturing sector, with expansion sustained since April 2009.
While there was a rise in new business orders received in the month under review, the rate of growth slowed sharply since June to the weakest in the current 28-month period of expansion. Also, new export orders contracted for the first time since May 2009, amid softer demand in key export destinations like the US and Europe.
July data indicated the first increase in Indian manufacturing sector employment for nine months. Labour shortages have restricted firms' ability to fill vacant positions in recent survey periods. The increase in staffing levels suggested that the lack of suitable workers had improved to an extent, but the rate of job creation was modest, with the majority of respondents indicating no change in employment at their units since June.
Backlogs of work at manufacturers rose for a 16th consecutive month in July, albeit only slightly. Panellists commented that the continued rise in new work intakes and ongoing production constraints had led to the latest accumulation of outstanding business. Inventories of finished goods also rose, but at a modest rate.
Input costs rose substantially in July, driven by higher raw material costs. The rate of input price inflation was slightly faster than that recorded in June. The latest rises in both input and output prices remained higher compared with their respective long-run series averages.
Commenting on the India Manufacturing PMI survey, Leif Eskesen, chief economist for India & ASEAN at HSBC said: "The momentum in the manufacturing sector eased further in July as sequential growth in output and new orders slowed, although employment picked up. In turn, backlogs of work grew less fast and supplier delivery times shortened.
"On the inflation front, input costs and output prices accelerated. These numbers confirm that inflation pressures remain firmly in place despite the ongoing moderation in growth. The RBI will, therefore, have to maintain its tightening bias for a while still to anchor inflation expectations."
Though imports grew by 42.4% to $36.8 billion in June, the trade deficit of $7.6 billion was almost half the level of $14.9 billion seen in May, lessening concerns over the country's balance of payments situation
New Delhi: India's exports grew by an impressive 46.45% to $29.21 billion in June 2011 compared to exports worth $19.94 billion in June 2010. The performance was despite uncertainty in the US and European markets, reports PTI.
During the April-June quarter, overseas shipments grew by 45.7% to $79 billion, according to commerce ministry data released today.
Though most sectors posted robust expansion-be it petroleum products, ready-made garments, engineering or pharmaceuticals-commerce secretary Rahul Khullar sounded a cautionary note, saying that news from the largest two markets the US and Europe "is far from cheerful... Summer is not over. It is still not going to be easy".
The US and Europe together account for about 35% of the country's exports which stood at $246 billion in 2010-11.
Though imports grew by 42.4% to $36.8 billion in June, the trade deficit of $7.6 billion was almost half the level of $14.9 billion seen in May, lessening concerns over the country's balance of payments situation.
In April-June 2011-12, inbound shipments rose by 36.2% to $110.6 billion, led by the import of $30.5 billion worth of petroleum products. The trade gap during the period stood at $31.6 billion.
Oil and non-oil imports increased by 30% and 47.8%, respectively, during the month under review to $10.18 billion and $26.6 billion.
During the first quarter, oil imports grew by 18.1% to $30.52 billion from $25.84 billion. Non-oil imports, too, increased by 44.68% to $80 billion from $55.35 billion in April-June 2010-11.