Government mulls cotton export ban as farmers agitate

The government will take a decision on whether or not to ban cotton exports after assessing the domestic demand and supply situation, textile secretary Rita Menon said on Thursday.

"We are closely watching the price scenario in cotton,'' Menon said, adding that the current rise in cotton prices is in tune with an increase in the domestic demand.

Domestic prices of cotton have been on the rise despite an increase in production expected this year. Several industry bodies have approached the government seeking a ban on cotton exports, saying the price rise is due to the increase in export of raw cotton.

Traders said despite good crop arrivals, prices of leading varieties had shot up 8 per cent primarily due to a surge in export demand. Cotton exports in October, including those of the most sought-after Gujarat Sankar6 variety, surged 300 per cent to about 116,000 bales from a month earlier, according to the Cotton Association of India.

While the government remains keen on boosting its revenue through cotton exports as supplies have become scarce in the international market, farmer associations are up in arms against this policy. (See: Government eyes higher cotton exports, but farmers say 'no')