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India withdraws its brief cotton export ban

The Indian government has allocated one million bales of cotton to its exporters, withdrawing a ban on the export of the fibre for a brief period, local importers said.

The Indian cotton exporters received the allotment on July 6. The Director General of Foreign Trade (DGFT) of India has given the allocation of cotton export quota to 227 eligible applicants.

As per the government announcement, Indian exporters would have to register their shipments by July 15, said a DGFT circulation. The last date of shipment has been stipulated as September 15, the circulation said.

Earlier, a total of 5,270 bales of cotton entered Bangladesh through Benapole Land Port after the Indian government temporarily withdrew a ban on cotton exports on January 11.

The Indian government has already set an export ceiling of 5.5 million bales for the ongoing season from October 2010-September 2011.

India imposed the ban for the second time on December 15 last year to boost its stocks for the local market. In 2010, the first ban came on April 21 and continued till October 31.

Probir Kumar Saha, an importer of cotton from India, said the deadline for opening letter of credits to import cotton from the allotment is today. “But, demand for cotton this time is very low. The allotment for January finished within the shortest period,” he said.

Demand for cotton is low this time because the price of the item is declining worldwide, he added.

Moreover, spinners are careful in purchasing cotton as yarn stockpiles are increasing for the flood of cheaper Indian and Chinese yarn, he said.

Bangladesh would have benefitted from such a move by India if it came a lot earlier, he said.

“The only benefit from the latest move is that the local importers will be able to get the cotton as early as possible as India is our neighbouring country. Now, we have no price benefit,” he said.

“Our government should sit with the Indian government to discuss the cotton issue, as India suddenly imposes a ban on export of cotton and lifts the ban, according to their will. Such sudden moves hamper growth of the local spinning sub-sector,” said an importer. India is the second largest cotton producing country in the world.

http://www.thedailystar.net/newDesign/news-details.php?nid=193832