* Government order silent on volume of extra exports
* Aims to clear out stocks before start of new season
By Meenakshi Sharma
MUMBAI, Aug 2 (Reuters) - India has relaxed restrictions on
the export of cotton by the state-run Cotton Corporation of
India (CCI) in the current season to end-September as the
world's second-biggest cotton grower expects a better crop in
Hefty monsoon rains have encouraged farmers to plant more,
and the area sown with cotton has risen to 10.85 million
hectares as of Aug. 1 from 10.11 million a year
CCI has exported 3,000 bales so far this season, the maximum
allowed under current rules. It sought permission to ship more
to reduce its stocks ahead of the start of the new-season
harvest from Oct. 1, Chairman B. K. Mishra said.
"This season CCI has sold its stocks mostly into the local
market, and if they are exporting, it means they are expecting a
huge crop next season and want to clear the old stock," Prerana
Desai, vice-president of research at Kotak Commodities, said.
The government earlier on Friday issued a notification
allowing CCI to export cotton under relaxed norms. It did not
relax the restrictions for private traders.
Mishra said CCI had not received any official confirmation
about the quantity to be exported in the current and the coming
"We had in the past sought permission from the government to
export 50,000 bales of cotton in the current season with relaxed
norms," he said.
The Indian government, through the CCI and farmers'
cooperative NAFED, has bought 2.5-3.0 million bales of cotton in
the current crop year. CCI has a stockpile of around 900,000
bales. India's production is estimated to be 34 million bales in
In April, the government allowed the state agencies to sell
cotton into the domestic market from state reserves.
"We will see the market conditions and the international
price and then decide on exports. As of now it does not look
viable because domestic prices are higher," Mishra said.
CCI is selling cotton into the domestic market at an average
price of 43,000 rupees per candy of 356 kg, equivalent to 90.65
U.S. cents per lb. Overseas it will get around 87-89 cents for
the same variety, two traders said.
In New York, the December cotton contract on the
Intercontinental Exchange was at 85.16 cents per lb at 1436 GMT.
($1 = 60.2650 Indian rupees)
(Editing by Nidhi Verma and Jane Baird)