Under pressure, Govt lifts ban on cotton exports

The government on Sunday decided to lift the controversial ban

on cotton exports imposed last week in the “interests of farmers, industry and trade.” “Keeping in view the facts, the interests of the farmers, interest of the industry, trade, a balanced view has been considered by the group of ministers (GoM) to roll back the ban,” commerce minister Anand Sharma.

The GoM, headed by finance minister Pranab Mukherjee assessed the cotton export ban on March 9, after a directive from Prime Minister Manmohan Singh to “urgently” review the decision, amid stiff opposition from agriculture minister and NCP chief Sharad Pawar, who allegedly said that he was not consulted before announcing the decision. The government had probed into the allegations of foul play by unscrupulous traders in licence grabbing.

The move will raise hopes for exports of around 3.5 million bales of cotton for which registration had been completed before the ban was imposed on March 5. Citing updated data, trade sources said around 13 million bales of cotton had been registered for exports, of which 9.5 million bales were shipped out. The country had exported around 8 million bales last year through September 2011.

While, commerce and textile minister Anand Sharma on March 7 defended the ban, saying, “we could not countenance a situation where the country, which is a major cotton producer, is forced to import at much higher prices to meet the domestic demand. We were informed that there has been cornering of huge quantities (of cotton) by handful of big players who have exported to their own warehouses abroad. It did cause alarm”, Textile Secretary Kiran Dhingra said that the ban was also in step with the policy approved by the informal GoM in April 2010 that the country will maintain a carry-forward stock level of at least five million bales each year and “only surplus cotton should be exported”.