India Eases Restrictions On Cotton Exports
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The Indian government has decided to lift its restrictions on fresh cotton exports, after unexpectedly announcing a ban on March 5th this year following concerns over the domestic supply.
According to a report by Reuters, 1.5-2 million bales of cotton will be allowed for export for the current year ending September 30, which before the ban had already seen a record 11.5 million bales sold overseas.
The Indian government has decided to lift its restrictions on fresh cotton exports, after unexpectedly announcing a ban on March 5th this year following concerns over the domestic supply.
According to a report by Reuters, 1.5-2 million bales of cotton will be allowed for export for the current year ending September 30, which before the ban had already seen a record 11.5 million bales sold overseas.
[quote]”A decision has been taken to remove the suspension of cotton export registration. Registration of cotton exports will be allowed by the government,” said India’s Trade Minister Anand Sharma on Monday.[/quote]Along with the trade ministry, India’s farm and finance ministers are also expected to review cotton exports before briefing the Prime Minister on the issue.
The move is likely to go far in quelling dissent from both the local and international cotton industry, who had been up in arms following the Indian government’s decision to ban cotton exports in March.
Related: Cotton Prices Soar After World’s Second-Largest Producer Ban Exports
Related: Growth of Indian Textile Industry
Back then, Bhadresh Mehta, the additional vice president of the Cotton Association of India, described the decision as ” a wrong move by the government,” which “will dent global confidence in India.”
John Flanagan at Flanagan Trading added that “India was proving to be an unreliable source of cotton,” with the void likely to be filled up by the United States.
However an increase in production estimates has allowed the Indian government to rescind its ban – prompting domestic prices to rise on Monday with the promise of exports.
Anand Sharma said that India’s position regarding cotton could be “regularly reviewed” based on production estimates and export figures.
A second review is expected to come in 2-3 weeks though Sharma said that quantitative restrictions were unlikely.
“We have accepted agriculture ministry’s data on cotton production. Based on revised estimates of the Cotton Advisory Board as well as the agriculture ministry, we have decided to remove suspension on registration of cotton exports,” said Sharma to the Times of India.
Opposition leaders though have called for the government to assist the Indian cotton industry further, especially with the waste of resources going into storing cotton.
“There has been a record production (of cotton) but there is no proper storage space and poor procurement process. The grains are rotting and farmers are suffering. The government is not taking any steps to sort this issue. What is the government doing on this? There is no coordination between the states and the Centre on the issue,” said Janata Dal (United) party Sharad Yadav, as cited by IBN-Live.
[quote]”The farmers are suffering and the government is not taking any steps. The farmers are not afraid of dying. They are committing suicide,” he added.[/quote]
