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India had capped cotton exports at 5.5 million bales of cotton between November 1 and December 15. With less than half the exports going through, the government s looking to extend the deadline and possibly increase exports.356 kilograms (783.2 lbs) of cotton cost Rs. 27,000 (approx. $600) in December last year compared to Rs. 45,000 ($1000) in 2010.
India’s $62 billion textile industry is at loggerheads with the government.
While traders are worried that delays in exports and the issuance of export licenses could significantly increase domestic inventories, causing cotton prices to plummet at home, the textile industry, expecting seasonal delays, is asking for a ban on current exports to ease unusually high prices.
India’s export bans have impacted the global market as well. With Pakistan’s cotton harvest destroyed by monsoon floods and China’s increased cotton consumption, their has been a demand-supply imbalance in the global market causing a spike in cotton prices. Members of textile industries in Pakistan, Bangladesh in Vietnam are said to have lost billions of dollars due to India’s export ban.
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