“According to the registration contract, the exporters are committed to
ship out 55 lakh bales of cotton by December 15 this year. According to CITI, the quantity of 55 lakh bales that government had
assessed as exportable surplus for the entire cotton year 2010-11
(October-September) has already been applied for registration with the
textile commissioner…However, the arrival of lint cotton in the market until November 30
would be only around 60-65 lakh bales (excluding kapas in transit and
process) and consumption during the period would exceed 45 lakh bales. ..

CITI says that even if last year’s ending stock of 40.5 lakh bales is
taken into account in full, there will be practically no cotton stock
left in the country if 55 lakh bales get exported during this time. This
will lead to a cotton famine in the country and mills will be forced to
close down or scale down production drastically.
..In a letter to Prime Minister Manmohan Singh, the chairman of CITI
Shishir Jaipuria has made certain suggestions which includes that
shipment of 55 lakh bales cotton to be staggered over the months by
stipulating a monthly cap of 10 lakh bales from January 2011 onwards. ..

The letter says that no extension of time should be allowed for those
who fail to ship within the stipulated time and further applications for
registration should not be accepted from them. Jaipuria further
suggests, “An export incentive of 1.5% is given by government on cotton
exports and this may be withdrawn and export duty put into operation at
the earliest.” It further says that cotton exports against contracts
already registered with Textile Commissioner should be delayed up to
January 1, 2011.