The Indian government recently ended a controversial ban on cotton exports, implemented just last week, allowing further supply into a saturated market. The end of the export ban is expected to lower international cotton prices.
The ban was suddenly announced on March 5, after nearly 10 million cotton bales had been shipped overseas. The ban was announced with an estimated 2 million bales outstanding, leaving a total of nearly 12 million bales slated for. The export ban, agricultural officials said, was intended to protect Indian textile manufactures.
The high international supply is expected to further depress record low prices. In 2011, cotton closed as one of the worst performing commodities of the year, with prices dropping 37 percent since 2010.
Indian farmers and exporters are pleased by the government’s about face. “It’s good news as far as (exporters) and farmers are concerned,” said the Vice President of the Cotton Association of India, which represents farmers, exporters, and traders. “We must realize that we are a cotton surplus country and our surplus needs to be exported. These are short-sighted views that (the textile) industry sometimes takes by asking to ban cotton exports.”
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Written by: Justin Ellison / Farm Plus Staff Writer