Indiaâ€™s Cotton-Export Ban Should Be Lifted, Minister Says
Bloomberg - Mar 7th 2012, 08:05
India's farm ministry wants a ban on cotton exports to be revoked as the curbs will hurt farmers in the worldâ€™s second-biggest producer, minister Sharad Pawar said. Futures surged for a second day to the highest level in more than two weeks.
The ban will lower domestic prices and hurt planting prospects in next crop season, Pawar told reporters in New Delhi today. The ministry has written to Prime Minister Manmohan Singh to rescind the ban announced by the commerce ministry yesterday, he said. The curbs are to prevent depletion of domestic supplies, according to the textiles ministry.
Pawar joins the Cotton Association of India in calling for an end to the ban that may help stem a 57 percent slide in futures in New York in the past year and trigger contract disputes with buyers from China to Bangladesh. Prices surged to a record last year after India restricted shipments of cotton and yarn, boosting costs for Gap Inc. (GPS) and J.C. Penney Co.
â€śPrices may be supported by expectation that cheap Indian cotton wonâ€™t be available in the future,â€ť Dong Shuzhi, a trader at PKU Founder Commodities Co., said by phone from Shanghai.
The May-delivery contract jumped as much as 2.2 percent to 94.24 cents a pound today on ICE Futures U.S., the highest price since Feb. 17. Futures surged by the most in nine months yesterday and the exchange boosted margins by 76 percent.
India banned exports after sales surged to nearly 9.4 million bales of 170 kilograms each, more than the surplus of 8.4 million bales estimated by the government. Traders registered to ship 12 million bales and the rush to secure permits with letters of credit being opened between the same buyers and sellers was â€śindicative of a tendency of hoarding in bonded warehouses abroad,â€ť the textiles ministry said.
A panel of ministers will meet on March 9 to review the ban, supply and demand in the domestic market, Kiran Dhingra, textiles secretary, told reporters in New Delhi. She ruled out a ban on exports of cotton yarn. The textile mills are carrying the lowest cotton inventory in the past decade, Dhingra said.
The ban may affect Bangladeshâ€™s textiles industry as it depends on India for supplies, Jahangir Alamin, president of Bangladesh Textile Mills Association, said in a phone interview from Dhaka. â€śIndia has always been inconsistent in cotton exports,â€ť he said.
Bangladesh imports 30 percent of its annual cotton needs from India. the country consumes 3.7 million bales of cotton a year, Alamin said.
Production in India will be lower than earlier forecast after diseases cut yields in the states of Maharashtra and Andhra Pradesh, according to the Cotton Advisory Board. The harvest may reach 34.5 million bales of 170 kilograms each in the year that began Oct. 1, against 35.6 million bales estimated on Nov. 15, it said on Jan. 24.
Farmers will be less inclined to plant cotton next year as local prices have slumped after the ban, said Parth Mehta, joint managing director of Bhadresh Trading Corp., an exporter.
â€śApril is the time when the farmers will start planting and if they are getting prices below the government guaranteed levels, which farmer in his right mind will want to sow cotton?â€ť he said. â€śThere is definitely going to be a huge impact on the acreage that is going to go under cotton.â€ť
Indiaâ€™s government buys cotton at guaranteed prices to guard farmers against distress sales in the open market.
Futures on the National Commodity & Derivatives Exchange of India Ltd. in Mumbai plunged 8.5 percent in February, the most since June. Prices fell by the daily limit of 4 percent yesterday and rebounded 1.7 percent to 829 rupees ($16.5) per 20 kilograms at 5:11 p.m. in Mumbai.
Report: Indian Reserve Bank to rule on Walmart probe
21/10/2013 - 11:44
Bentonville, Ark. â€“ The Indian central bank is reportedly reviewing findings of an investigation into whether Wal-Mart Stores broke that countryâ€™s investment rules in 2010.
'Indian beer industry poised to grow 20 times'
07/10/2013 - 10:58
The Indian beer market is expected to grow 20 times in next 20 years in view of changing lifestyles, a burgeoning middle class and government policy to promote low alcoholic drinks in the country.
South African wine producers to feel the heat
05/08/2013 - 08:53
Cape Town - The global wine industry is worth $230bn a year and the potential yields for the South African industry have never been as great, nor the pitfalls as plenty, according to Linda Buckley, director of executive education at UCTâ€™s Graduate School of Business (GSB).
UK: Sports mania hindering sales, John Lewis
22/07/2013 - 10:51
London - John Lewis, Britain's biggest department store firm, has blamed Andy Murray's Wimbledon triumph, the first Ashes test in cricket and a heat wave for keeping shoppers out of its stores last week.
Rise in retail sales seen as a quirk
19/07/2013 - 07:59
Retail sales shot up in May after Aprilâ€™s growth was the lowest since 2009, but analysts cautioned yesterday that the growth was not sustainable in light of the realities of strikes and sluggish gross domestic product growth.