The ban on export of cotton imposed earlier this week is to be lifted, decided a Group of Ministers (GoM) looking into the issue. A formal announcement would be made tomorrow.
State governments and industry associations welcomed the move, with some residual apprehension if there were any riders to the withdrawal. “Keeping in view the facts, the interests of the farmers, interest of the industry and trade, a balanced view has been considered... to roll back the ban,” said Anand Sharma, ministry of commerce, industry and textiles, here today.
Earlier last week, following protest against the Monday ban order of the Directorate General of Foreign Trade (DGFT), the panel, under finance minister Pranab Mukherjee, had a meeting, which was inconclusive.
The ban was imposed on apprehension of a likely shortage in the home market due to uncontrolled export and alleged hoarding to take advantage of a rise in international prices. Export of cotton this year has already topped 9.5 million bales (a bale is 170 kg), with registration for export already 12 million bales. The agriculture ministry has estimated cotton output to reach a record 34.08 million bales in 2011-2012, up 3.2 per cent from last year.
Growers and traders in Maharashtra and Gujarat protested at the ban. Agriculture minister Sharad Pawar, who’s from Maharashtra, said he was not consulted on the decision and it was a most unwise move. The chief ministers of the two states also made their opposition vocal.
The decision also invited criticism from importing nations, India being one of the largest cotton exporters. Calls for a review came from official entities in Bangladesh and China.
State-run Cotton Corporation of India, which had started procurement after a crash in prices due to the ban announcement, hoped farmers would restart sales and ginning factories begin their operations.
Pawar, who had sought the Prime Minister’s intervention, thanked his colleagues for taking his advice, “in the larger interests of farmers and exporters”. “India's credibility in the international market is important. We have to see that India continues to be a valuable cotton supplier.”
Added Maharashtra CM Prithviraj Chavan: “Export of agricultural commodities should not be based on switch-on and switch-off policies. Such quantitative restrictions should not be there on exports.”
The Cotton Association of India and the Maharashtra State Cooperative Cotton Growers Marketing Federation estimated the loss due to the five-day ban at Rs 5,000 crore. The heads said they hoped the lifting of ban came without exceptions and the export situation normalised.
