India Allows Cotton Exports Under License
May 27, 2010 Reuters India
Sourav Mishra and Meenakshi Sharma; Editing by Ramya Venugopal
India has allowed export of cotton under license just as new plantings begin and a month after it halted shipment registration to rein in domestic prices, an official with the textile ministry told Reuters.
“Now the export of cotton is allowed under license. This is with immediate effect,” said BA Patel, joint textile commissioner.
India on April 19 had stopped cotton export registration to control soaring local prices, tightening global supplies including top consumer China.
“This order now supersedes the earlier order issued in April,” Patel said.
India had shipped 6.26 million bales of the fiber and had registered 8.6 million bales before halting further export registration, government data showed.
“It’s good for raw cotton exporters. Prices may go up once again,” said Chowda Reddy, a senior analyst at Kochi-based JRG Wealth Management.
Cotton prices had fallen up to 20 percent in the past one month, though they are still about 34 percent higher than prices that prevailed during the same period last year, government data showed.
Analysts and traders said the decision just as the planting season begins will boost the acreage.
“This decision will give farmers better prices and boost acreage… but it is uncomfortable for the textile industry,” said Rakesh Rathi, president, North India Cotton Association.
China, which buys more than 60 percent of Indian exports is also likely to benefit from the decision. China has 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.
(Story found in original format here.)
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