India rolls back cotton exports ban

Buckling under domestic and international pressure, the Indian government Monday lifted the ban on cotton exports barely a week after imposing it.

The government, however, said it will not issue any new export registration certificates and only bales registered for shipment before the ban was effected March 5 would be cleared for exports.

“The central government hereby withdraws the notification… dated March 5,” the Directorate General of Foreign Trade (DGFT) said in a notification withdrawing the ban that was clamped citing shortage of supply and increased domestic demand.

The roll-back followed widespread protests from political allies and the opposition, farmers and traders within the country and buyers, especially China, the biggest importer of Indian cotton.

Agriculture Minister Sharad Pawar and Gujarat Chief Minister Narendra Modi had asked for lifting the ban, saying the curb would would hurt planting prospects while an industry group in China said the move damaged international trade.

Commerce Secretary Rahul Khullar told reporters here that fresh registrations for cotton exports would not be allowed until further notice.

“Keeping in view the interests of farmers, traders and industrialists, a balanced view had been taken to roll back the ban on cotton exports,” Commerce and Industry Minister Anand Sharma had said Sunday.

The decision to lift the ban was taken last week by a group of ministers (GoM) chaired by Finance Minister Pranab Mukherjee.

The GoM is scheduled to meet again in the next two weeks to assess the cotton budget afresh and take an appropriate policy view on the matter, the commerce ministry said in a statement.

The government had banned exports of the fibre fearing a fall in availability in view of rising consumption at home.

According to the ministry, higher exports than anticipated in cotton season 2010-11 reduced the expected carryover of stock for the current cotton season 2011-12, from 48.30 lakh bales estimated by the Cotton Advisory Board to about 33 lakh bales.

At the same time production this season was virtually the same as last year’s, and total supply marginally lower.