Yesterday India banned all exports of cotton with immediate effect which has increased global prices as much as 4.5% and is thought to squeeze global supplies.
“Export of cotton has been prohibited till further orders,” said a statement from the Directorate General of Foreign Trade (DGFT).
India is the second largest producer and exporter of cotton in the world and will make 16.7% of global exports in 2011/12.
The reason for the ban was reported as the trend of domestic consumption and depletion of domestic availability according to the Indian Government. Apparently there are also signs of other countries stockpiling cotton.
The result of the ban could mean that CHina could start buying from the USA which would increase prices further.
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More information of the ban can be found here.Categories: Industry News