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LATEST NEWS UPDATES | Government blinks, cotton export ban to go today

Government blinks, cotton export ban to go today

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published Published on Mar 12, 2012   modified Modified on Mar 12, 2012
-The Economic Times

The government has decided to lift the ban on cotton exports from Monday, just a week after imposing it, buckling under pressure from farmers, traders and politicians. 

"Keeping in view the facts, the interests of farmers, industry and trade, a balanced view has been considered by the group of ministers to roll back the ban and a formal order will be made public on Monday by the government," Commerce Minister Anand Sharma said on Sunday. 

The Directorate General of Foreign Trade (DGFT), which is under the commerce department, had banned cotton exports on March 5 after a meeting of the committee of secretaries noted that carryover stocks of the cash crop had fallen below recommended levels. 

The decision had drawn sharp criticism from Farm Minister Sharad Pawar, besides cotton growers and traders in Gujarat and Maharashtra. 

Pawar, who was not in the country when the ban was imposed, said he was not informed about it and that the move would harm farmers. 

A ministerial panel headed by Finance Minister Pranab Mukherjee had met on Friday to review the ban after Gujarat Chief Minister Narendra Modi and a delegation from the state's Congress party voiced their concerns to the prime minister. However, no announcement was made immediately after the meeting. 

On Sunday, Congress MP Ahmed Patel, Gujarat opposition leader Shakti Singh Gohil and CPP president Arjun Modwalia met Sharma to press for a lifting of the ban. 

However, it is not clear whether the government will lift the ban completely and allow issuance of fresh registration certificates or will only allow exports of the consignments registered with the DGFT. 

"Since allowing just the registered consignments to be exported would result in a significant depletion in the already reduced stocks, it seems unlikely that fresh registration certificates would be issued," a government official told ET. 

Textiles secretary Kiran Dhingra had explained earlier that the ban was imposed after it was noticed that 9.4 million bales of cotton had been shipped against the 8.4 million exportable surplus calculated by the cotton advisory board in January. 

The surplus exports had brought down carryover stock to 3.6 million bales, against the 5 million bales that a GoM had recommended in April 2010 to avoid shortage. 

Allowing exports of the 12 million bales that have been registered will lower the surplus further, which can get wiped out if fresh registration for exports is done. 

Cotton growers and traders have, however, been protesting against falling prices, which have dropped to about 3,000 a quintal from more than 4,000 last month. The Cotton Corporation of India has, however, been advised to make procurements at all mandis where prices fall below the minimum support price fixed by the government. 

Last year, too, exports of cotton, a key input for the textile industry, were banned for a long period to avoid shortage in the domestic market. The commodity was allowed to be freely exported only after the government was satisfied that there was enough at home.


The Economic Times, 12 March, 2012, http://economictimes.indiatimes.com/news/economy/foreign-trade/government-blinks-cotton-export-ban-to-go-today/articleshow/12226249.cms


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