India Government May Increase Export Limit For Cotton

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After a sharp decline in the past two months,

The cotton export policy is being reexamined.

The government has capped the export volume of this year to 5 million 500 thousand bales (170 kg / bag).

However, due to low domestic demand and low prices, the industry hopes to expand exports.

A delegation met with the federal finance minister, the textile minister and the political secretary of the Congress party earlier this week. They were told that the cotton advisory committee would study the situation.

Because of this hope, the price of Mumbai market has risen in the past two days.

The benchmark price of Carle 6 varieties rose from 45000 rupees to 43000 rupees / candy (356 kg).

According to Bagg Bansal, President of the Punjab cotton mill Association, cotton traders, ginning mills and exporters hold about 4 million 500 thousand bales of cotton. Besides, there are about 2 million packages of cotton that have not yet been sold in Gujarat, Maharashtra and central states. Even if the output is increased by 1 million 500 thousand bags, cotton stocks are still large.

The ginning and cotton merchants said that if prices and demand continue to decline, farmers will be hit.

It is said that cotton planting area has been expanding in recent years in India, but if farmers can not get a fair price, the planting area may be reduced.

Global cotton is 30% higher than India's current cotton price.

If exports are not allowed, the carry over inventory will lead to a further decline in prices before the new cotton goes public.