March 12, 2012

 

 

China has termed India's decision to ban exports of cotton as "irresponsible" and disruptive of the global market.

 

India, the world's second largest cotton producer, said today it had banned exports with immediate effect to ensure supplies for domestic mills, leading to speculation that main consumer China would have to look at other sources.

 

The China Cotton Association has called for a review of the decision.

 

"As a member of the international trading family, we hope the Indian government will rectify this market-disrupting and mistaken policy in a timely fashion and comply with global trade rules," the statement said.

 

Citing previous Indian attempt in 2010 to ban cotton exports it said, it had caused "heavy losses" to Chinese textile producers besides hurting local Indian producers.

 

The current cotton year had already seen the export of 9.5 million bales beginning on October 1, which stood higher than the projected export surplus quota of 8.4 million bales set in January, due to strong demand from China.

 

India's cotton farmers are not convinced about the desirability of the ban as it has sent domestic prices further into freefall. The issue is expected to be taken up by ministers in New Delhi.

 

Meanwhile, Bangladesh too has slammed India's ban on cotton export as "unfortunate", adding the move was against the norms of international trade.

 

According to Bangladesh's commerce ministry, the repeated ban on cotton by India was threatening Bangladesh's textiles industry.

 

"India imposed ban on export of main raw material leaving aside trade rules and regulations. We think it (ban) is against the norms of international trade," commerce secretary M Ghulam Hossain told reporters.

 

According to Hossain the ministry condemned India's "unexpected move". He also wrote to the Indian government for withdrawal of the ban.

 

"If not, Indian government has been urged to take steps to release all agreements related to cotton to ensure unloading of inputs from ports smoothly," he said.

 

According to the top Bangladeshi bureaucrat, production of the textile input was good and price was low too.

 

Hossain added, however, he expected India's ban on cotton export not to hurt the local textiles industry as the ministry was keeping vigil against artificial enhancement of the cotton price.

 

"We are (also) looking for alternative sources of import of cotton such as Uzbekistan, Australia and the US," he said adding that a high-powered delegation led by Commerce Minister Faruq Khan would visit next month to Uzbekistan to explore possibility of importing cotton to meet Bangladesh's demand.

 

He added, the ministry would contact US Cotton Council to this end.