The government has allowed exports of cotton but made licenses mandatory for shipments as India -- the world's second-largest supplier -- tries to strike a balance between ensuring availability of the raw material for the local textile industry and higher prices for farmers.
The centre had suspended fresh registrations for exports on April 19 after textile mills blamed large-scale shipments for a sharp rise in prices and fall in local availability. That drove prices down to Rs 27,700 per candy of 356 kg as of April 30 from Rs 28,200 on April 19, official data showed.
Agriculture minister Sharad Pawar had met prime minister Manmohan Singh to seek his intervention to lift the ban as it was hurting cotton farmers. Most of the cotton exports are to China which competes with India in the textiles market.
Cotton prices are rising in the international market as global demand for textiles is growing again. The decision to make licenses mandatory is likely to help the government monitor exports and take immediate steps to control the flow if necessary.
"Exports will be more restricted now," said joint textile commissioner B.A. Patel. "Now the exporters will have to seek a license from the Directorate General of Foreign Trade before exporting." He said the government may put in place a framework listing the quota for exports.
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