the world’s second-biggest cotton producer, scrapped a one-week-old ban on exports of the fiber after protests from growers, traders and China, the nation’s largest customer. Prices dropped.
“Keeping in view the interests of the farmers, industry, trade, a balanced view has been considered by the Group of Ministers to roll back the ban,” Trade Minister Anand Sharma said in an e-mailed statement yesterday.
The ministry will publish details for repealing the March 5 ban today, Sharma said. India barred exports to secure domestic supplies after sales exceeded the government’s estimate of the country’s exportable surplus. The resumption of international sales may add to global supplies and pressure futures, which have fallen 55 percent in New York in the past year.
“This will help farmers get a higher price immediately, at least 10 percent more, and encourage cotton planting for next year,” Dhiren Sheth, president of the Cotton Association of India, said in a phone interview yesterday. “The government decision will help avoid disputes and arbitration in international markets.”
The May-delivery contract dropped as much as 0.9 percent to 88.01 cents a pound in on ICE Futures U.S. before trading at 88.38 cents at 10:21 a.m. Singapore time. The ban drove prices up by the daily limit on March 5, and to 94.24 cents the following day, the highest level since Feb. 17. They fell 0.9 percent on March 9.
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