India Or Fine Adjustment Of Cotton Export Ban Policy

Recently, India decided to ban the export of cotton, but this policy was immediately attacked by the China Cotton Association, saying that "India's policy of banning cotton exports seriously disrupts the international trade order". According to the latest statement by the India government on the afternoon of 9, the India government will modify the cotton export ban later on Friday, and will allow the export contracts that have been registered with the government before March 4th to continue. However, analysts believe that India's ban on cotton exports has limited impact on cotton prices worldwide.

　 India or fine-tuning cotton export policy

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India's foreign trade chief issued a statement on March 5th, saying that since the announcement, cotton exports were banned immediately, including export orders registered with the government, until the government issued further instructions. This is the second time the India government has introduced the policy of restricting cotton exports after 2010.

India's domestic opinion said that the move was to meet the raw material demand of domestic textile producers. According to the data provided by the government of India on Monday, as of Monday (March 5th), India has exported 9 million 400 thousand bales (170 kg / bag) of cotton this year, exceeding the 8 million 400 thousand package approved by the government, mainly due to strong demand in China.

India is the second largest cotton producer and exporter in the world, and 80% of its cotton exports to China this year. On the other hand, India is also one of the main sources of China's imports of cotton. According to China Customs data, in January 2012, China imported 326 thousand and 500 tons of cotton, of which 150 thousand and 400 tons came from India.

Therefore, India's ban on cotton exports was immediately opposed by China. In March 7th, the China Cotton Association issued a solemn statement entitled "India's policy of banning cotton exports seriously disrupting the international trade order". On behalf of the industry, it sent a letter to the Ministry of Commerce and industry of India and the India cotton association to express its strong protest against the India government. The statement said that the government of India frequently issued a policy of banning the export of cotton, causing Chinese enterprises to suffer undue huge losses. This will not only disrupt the global cotton trade order, but also distort international cotton prices, which will also bring risks and huge losses to textile enterprises and traders.

However, the India government also responded to China's opposition. Yesterday afternoon, the India government announced that the India government would modify the ban on cotton exports later on Friday, which would allow the export contracts that were registered with the government before March 4th. Reported that the cabinet Review Committee of the India government is scheduled to meet later today to discuss the details of the new cotton export policy.

Global cotton prices will be limited in the short term.

Huatai joint analysis believes that in the past 2011-2012 years, under the background of weak global demand and oversupply of cotton, domestic and foreign cotton prices were all down and down. Affected by the domestic purchasing and storage policy, the domestic cotton price has a premium of 1000-2000 yuan or more than 2000 yuan per ton of cotton compared to the US and India exports. Therefore, textile enterprises have increased the intensity of importing cotton from India.

Yesterday's news indicates that the government has allowed the contracts already signed to continue. Sliding platform joint believes that it seems that India's 2011-2012 years of cotton exports have basically settled. It is not expected that the policy will cause big fluctuations in cotton prices this year. The main impact of the policy will be on global cotton supply next year. India has exported about 1 million 500 thousand tons of cotton, which has achieved most of its exports in the past years, so it will not have much impact on the supply of global cotton in 2011-2012 years.

The market's policy of export ban is expected to stimulate cotton prices in recent years, but cotton prices are unlikely to rise sharply this year, judging by the fact that global cotton supply exceeds demand and the downstream demand continues to be weak. Meanwhile, India is about to adjust its export ban policy, which puts pressure on cotton prices again.

However, analysts pointed out that in recent two years, India's cotton export volume is about 1/6 of the global export volume and is the second largest exporter of cotton in the world. If its export policy is extended to the second half of the year, it may have a certain impact on the global cotton supply in 2012-2013 years.

It is worth mentioning that the history of cotton policy in India is repeated. Therefore, the sustainability of policy depends on the interests of the Ministry of agriculture and the Ministry of textiles. The implementation of the policy of banning cotton exports was not the first time in India. It was also implemented in March 2010. It was abolished in August of the same year. The main reason for the repeated policy lies in the interest game between the Ministry of agriculture and the Ministry of textiles.

India is already the second largest exporter of cotton in the world.