Union commerce and industry minister Anand Sharma has said that the government has decided to withdraw the ban on the export of cotton from India “keeping in view” various interests.
He said the ban, imported just days ago, has been withdrawn after consultations.
“The matter of cotton exports has been discussed. The group of ministers has also met,” he said.
“Earlier, MPs from Gujarat had met the Prime Minister and today our senior MP, Shri Ahmed Patel, Leader of Opposition in Gujarat, Shri Shakti Singh Gohil, CPP President, Arjun Modwalia met me and discussed the issue.
“Keeping in view the facts, the interests of the farmers, interest of the industry, trade, a balance view has been considered by the Group of Ministers to roll back the ban and a formal order will be made public tomorrow by the Government,” Sharma said in a statement.
The ban by India, one of the largest exporters of Cotton in the world, had left alarm bells ringing across the World. The ban on cotton exports was imposed after more than expected cotton was exported this year.
The government had fixed a particular quota as surplus cotton that can be exported this year.
Uncontrolled exports are feared to increase domestic cotton prices and make Indian yarn and textile uncompetitive, both within India and outside.
“Higher exports than anticipated in cotton season 2010-11 reduced the expected carry-over of stock for the current cotton season 2011-12, from 48.30 lac bales estimated by the CAB to about 33 lac bales.
“Crop size estimated at 345 lac bales on 24th January, 2012 has been further adjusted on the basis of projections made by the Department of Agriculture and reduced to 340 lac bales. Production, this season, is virtually the same as last year’s, and total supply marginally lower,” the ministry said recently.
Expecting a slowdown in domestic demand, export surplus was pegged at 84 lac bales. Being higher than exports in the last 2-3 years, it was placed on OGL with requirement of registration for purposes of monitoring, it noted.
“A review of export data showed that the limit was breached on 20th February, 2012 and exports of 91 lakh bales made by 29th February, 2012. At this rate, it is expected that exports would reach 100 lakh bales by mid-March 2012. This is clearly reflected by the registration of exports which reached 120 lakh bales.
“Significantly, 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,” the ministry had said.