Due to the delayed monsoon, Govt extends an extra month for duty-free imports of cotton.
As a result of the delayed onset of the monsoon in some of the growing regions, the Central Government has decided to provide an additional month for duty-free imports of cotton. The prior deadline for importing raw cotton was September 30, 2022; however, the Centre has now extended the deadline for raw cotton imports till October 31, 2022, via a notification that was issued on Monday.
The textile and yarn sectors will be able to source cotton at lower prices for an extended period of one month as a result of this decision, which comes as a relief to those businesses. Also Read | ‘Project Bandhan’ to use the mating disruption technique to stop the spread of cotton PBW.
Specifically, the sector had been asking for duty-free imports of cotton until the end of the year until domestic prices continued their upward trend. However, it appears that the government has also taken into account the interests of the growers, who were planning to harvest the crop by the end of October or the beginning of November.
The arrival of India’s cotton crop typically begins in October or November.
It would have been detrimental to both the domestic pricing and the cotton growers had the window been prolonged beyond December. However, a slight extension of the deadline up until October 31 is likely to preserve the interests of both the industry and the farmers, who are the stakeholders in this situation.
In February 2021, the cotton import tariff was set at a rate of 11 per cent. This was done at a time when the price of the fibre was fluctuating somewhere around ₹44,500 candy (of 356 kg each).
However, in April of this year, the Centre had permitted duty-free imports following the historic run of domestic prices to record levels of one lakh rupees per candy ginned cotton on the basis of lower crop predictions.
This decision was made in response to the historic run of domestic prices. The prices, on the other hand, have decreased by almost 10% in the past few weeks, mirroring the general feeling around the world.
On Tuesday, the ICE Cotton Futures contract for October was quoted at 101 U.S. cents per pound, which is equivalent to ₹63,350 yen per candy. On May 17, as a result of a worldwide shortage of fibre supply, the contract price reached its all-time high of 140 cents. Cotton comes from huge growers like Brazil, the United States, and Egypt and is imported into India.