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Economy Apr 10, 2012

Despite Modi pressure, no new permit for cotton exports

New Delhi: The Centre on Monday decided not to permit further cotton exports during the current marketing year,even as pressure is mounting from Gujarat to allow fresh registrations.

"Until further order, there won't be fresh registration," Commerce,Industry and Textiles Minister Anand Sharma told reporters after meeting of the Group of Ministers.

Cotton prices have remained firm over the past few days in anticipation of the ban being lifted. AFP

Traders said this could also mean no more exports in the current crop marketing year, as supplies would start falling in the coming months. The cotton season runs from October to September.

He said that about 2 to 2.5 million bale of cotton, which was already registered for exports, would be allowed but only after scrutiny and revalidation. The marketing year runs from October to September. One bales contains 170 kg of cotton. The Group of Ministers (GoM), headed by Finance Minister Pranab Mukherjee, reviewed the domestic supply-demand situation.

This is for the second time that the government banned cotton exports in recent years. Earlier exports were banned in 2009-10, but unlike this time, that ban was retained in wake of huge difference in domestic as well as international prices at that time as well as higher domestic demand

While the government had partially lifted a week-long ban on cotton exports on March 12, traders with prior registrations only were allowed shipments. The ban was announced on concerns that exports may lead to domestic
shortages. The decision to partially lift the export ban has come under a severe criticism from Gujarat Chief Minister Narendra Modi.

The GoM accepted the latest assessment of the the Agriculture Ministry which has estimated higher production than 34 million bales for the current season.
The state-run Cotton Corporation of India (CCI) has also been asked to maintain reserve of one million bales per month.

Agencies


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