By IANS,
New Delhi : India, the world’s second largest producer of cotton, Monday banned all exports of the fibre with immediate effect, fearing a fall in availability in view of rising consumption at home.
“Export of cotton has been prohibited till further orders,” said the Directorate General of Foreign Trade. “Export against registration certificates already issued will also not be allowed.”
Explaining the reasons behind the decision, the commerce ministry said the ban was ordered after taking into account the trend of domestic consumption and depletion of domestic availability.
“Availability has reduced to less than the production levels of 2009-10, and also reduced the carry forward figure below the advisable inventory level,” it said in a statement.
“Almost 94 lakh bales have already been shipped out, against an estimated export surplus of 84 lakh bales,” the ministry under which the foreign trade regulator works added.
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.
The crop size estimated at 345 lakh bales by the board Jan 24, 2012 has been further adjusted on the basis of projections made by the agriculture department and reduced to 340 lakh bales.
“Production, this season is virtually the same as last year’s, and total supply marginally lower,” the ministry said.
A review of export data showed that the limit was breached on Feb 20, 2012 and exports of 91 lakh bales made by Feb 29, 2012. At this rate, it is expected that exports would reach 100 lakh bales by mid-March 2012.
The ministry also said that registration of exports reached 120 lakh bales.
“There was a rush for registration after the figure of 84 lakh bales was reached and in some cases L/Cs have been registered where the name of exporting and importing party is same.
“This is indicative of a tendency of hoarding in bonded warehouses abroad,” it added.
The prices of cotton in the domestic market is around Rs.34,000-Rs.35,000 a candy which weighs 356 kg.