India lifts ban on cotton exports, but brings in license
May 22, 2010

With the beginning of the harvest in kharif or the winter crop season, India yesterday re-allowed the export of all varieties of raw cotton and cotton waste but said that henceforth, exporters will have to apply for a license (Click here to read the government of India report).  India which exports 60 percent of its produce to China had halted all exports on April 19, to control soaring domestic prices (which had risen 30-35 percent) and tightening global supplies.  New Delhi had also imposed Rs 2,500 per ton duty on cotton export to check the rising prices.

India had shipped 6.26 million bales of the fibre and had registered 8.6 million bales before barring further export registration, government data showed. Analysts and traders said the decision just as the planting season begins will boost the acreage.

China had issued an extra 800,000 tons of cotton import quotas this month on top of 1.89 million tons issued early in the year and the government may issue more if there is demand, the China Cotton Association said on Friday.

“This decision will give farmers get better prices and boost acreage, but it is uncomfortable for the textile industry,” said Rakesh Rathi, president, North India Cotton Association. The Indian textile industry have written to Union Textile Minister Dayanidhi Maran pleading to help support the industry by maintaining the ban. Representatives of the textile industry, through the Tirupur Exporters Association (TEA) have said that all sectors from the spinning mills down the value chain will be affected by raising the ban.


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