India's cotton export ban
The Indian government this week imposed a ban on all cotton exports from the country, in a move that is likely to put pressure on global supplies and prices.
The Indian government today (5 March) imposed a ban on all cotton exports from the country, in a move that is likely to put pressure on global supplies and prices.
Why, when it produces 30% more cotton than it consumes, and when the world's unused stocks of cotton are forecast to be 50% higher by the middle of 2013 than they were in 2010, has India banned cotton exports? And why is its government so desperate as to ban even cotton exports it's already approved? Mike Flanagan takes a look.
Industry watchers seem to have shrugged off initial concerns that India's decision to impose a ban on all cotton exports from the country for the second time in nearly two years will lead to pressure on global supplies and higher prices.
Forecasts continue to suggest international cotton prices will stay low in the 2012-13 season, thanks to a rise in global cotton stocks as production exceeds consumption.
India needs to instigate a cotton reserve of at least 2.5m bales a year to prevent shortages and rising prices caused by export surges, according to the Apparel Export Promotion Council (AEPC).
World cotton production in the 2011/12 season is set to reach a record of 123m bales, up 6% on the year before, due to expanding output in all countries except the US, according to data from the US Department of Agriculture (USDA).
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