India bans cotton exports
05/03/2012
“Export of cotton has been prohibited till further orders,” the DGFT said in a statement. “Export against registration certificates already issued will also not be allowed,” the notification said.
India had already exported 8.5 million bales, higher than government estimates made in January of 8.4 million bales of 170 kilograms each for the year, on strong demand from China. Over 80% of exports so far have headed to China.
Traders in India had signed contracts for nearly 10 million bales in total for export at $1.01-$1.03 per pound, including those already shipped.
Domestic textile makers were worried that such large quantities of exports would cut availability in the domestic market, traders said.
“(It’s a) very regretful decision and this will permanently damage the reputation of the country in the international market,” said Dhiren N. Sheth, president of the Cotton Association of India. “Prices are likely to touch support price levels very soon.”
In January, the state-run Cotton Advisory Board cut its estimates for cotton harvesting in the 2011/12 season ending Sept. 30 to 34.5 million bales of 170 kg each from its earlier projection of 35.6 million bales.
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