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India bans all cotton exports with immediate effect | India bans all cotton exports with immediate effect |
(about 17 hours later) | |
India has banned all exports of cotton with immediate effect, the government has said, amid a decline in production. | India has banned all exports of cotton with immediate effect, the government has said, amid a decline in production. |
Diseases have damaged crops in several states, cutting yields, and exports have been higher-than-expected because of strong demand from China, which takes about 80% of Indian production. | |
Indian textile makers have been concerned about shortages and high prices. | |
India is the world's second-largest producer and exporter of cotton. | |
Analysts said the move would squeeze global supplies and push up prices. | Analysts said the move would squeeze global supplies and push up prices. |
"Export of cotton has been prohibited till further orders," said a statement from the Directorate General of Foreign Trade (DGFT). | "Export of cotton has been prohibited till further orders," said a statement from the Directorate General of Foreign Trade (DGFT). |
"Export against registration certificates already issued will also not be allowed," the statement said. | "Export against registration certificates already issued will also not be allowed," the statement said. |
Futures up | Futures up |
India has already exported 8.5m bales of 170kg (375 lbs) in the financial year ending on 31 March, reports say, up from a government estimate of 8.4m bales made in January. | India has already exported 8.5m bales of 170kg (375 lbs) in the financial year ending on 31 March, reports say, up from a government estimate of 8.4m bales made in January. |
Contracts had been signed for nearly 10m bales to be exported in the period, including those already shipped, Reuters news agency says. | Contracts had been signed for nearly 10m bales to be exported in the period, including those already shipped, Reuters news agency says. |
The benchmark US cotton futures for May rose more than 4% to 92.23 cents on Monday on the news from India, Reuters said. | The benchmark US cotton futures for May rose more than 4% to 92.23 cents on Monday on the news from India, Reuters said. |
"It's an extremely bad decision," said Dhiren N Sheth, the president of the Cotton Association of India. | "It's an extremely bad decision," said Dhiren N Sheth, the president of the Cotton Association of India. |
"It will harm India's reputation in the international market [and] we will suffer long term," he told the Financial Times. | "It will harm India's reputation in the international market [and] we will suffer long term," he told the Financial Times. |
"More importantly, this is bad for farmers as the price of cotton will go down locally... We urge the government to rethink this regrettable decision," he said. | "More importantly, this is bad for farmers as the price of cotton will go down locally... We urge the government to rethink this regrettable decision," he said. |
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