Indian Textile Producers Press for an Export Ban.

After the panic caused by Russia’s wheat export ban, a proposed cotton export ban by Indian producers may cause the next fissure in global trade.

Indian textile producers are currently pressing for a ban on cotton export fearing they might not have enough raw material for themselves. India, the second biggest cotton and cotton products exporter in the world, currently panicked by especially heavy monsoon rainfalls, might cause a world-wide crisis in the textile sector if producers’ proposed ban is acknowledged by the government, experts say.

Last week, the Indian government imposed a partial export ban on the textile, however producers have suggested the partial ban is not sufficient, according to daily Referans reported Wednesday. Sector representatives who still complain that they cannot find enough raw materials appealed to Prime Minister Manmohan Singh that the “export should be banned entirely, until January 2011.” An appeal which immediately caused a boost in cotton prices pushing the commodity to its highest price in the last 15 years.

The Indian government previously said they did not have any intentions in banning the export of the commodity, which only fueled market suspicions when last week’s announcement was broadcast.

New Delhi limited exports to just 1000 kilograms in order to prevent the domestic industry from being obliged to purchase raw material but producers did not find the figure sufficient. Consequently markets started to expect a bilateral expansion of the limitation.

Currently investors are seeing a positive trend with the expectation that importers would be obliged to redirect purchases to the United States because of the price increase stemming from the supply shortage.

‘Monsoon may linger for a longer time’

The cotton harvest in India may be less than forecast if monsoon rains last longer than normal, according to the Confederation of Indian Textile Industry, Bloomberg broadcast Friday.

Production in the year from Oct. 1 may be less than the 32.55 million bales estimated by the Cotton Advisory Board last month, Bloomberg reported Confederation Vice Chairman Prem Malik as saying. Output this year is estimated at 29.5 million bales, according to the board. An Indian bale weighs 170 kilograms.

The inaccurate forecast may further tighten global supplies, stoking prices that have surged to their highest levels in 15 years on slumping inventories and damage to the crop in China, the world’s largest producer. U.S. mills have been “panic” buying, according to brokerage Varner Brothers in Cleveland, Mississippi.

“The expectations that the Indian monsoon may linger for longer than normal is something of extreme relevance to the international cotton market,” said Luke Mathews, a commodity strategist at the Commonwealth Bank of Australia. “Global supplies are extremely tight.”

Cotton has been the best performer over the past year on the UBS Bloomberg CMCI Index, surging 47 percent. The most-active contract, for delivery in December, advanced as much 1.5 percent to 97.18 cents a pound on ICE Futures U.S. in New York today, the highest price since June 1995.

Turkish cotton association well-prepared for commodity market fluctuations  

On the other hand, Çukurova Cotton, Peanut and Oily Seeds Agriculture and Sales Cooperatives Association, or Çukobirlik, announced their cotton purchase rates for 2010 and 2011, Anatolia news agency reported Thursday.

According to the announcement, Çukobirlik offers 1.37 Turkish Liras per kilogram for cotton from the Çukurova region, 1.38 liras for cotton from Hatay and 1.41 liras for cotton from Diyarbakır.

Çukobirlik chairman Abdurrahman Bal said the association has completely turned its back on cultivators and their sole aim was maintaining cooperative members’ contentment.

Bal also said that in the event of an increase in cotton purchase rates in foreign and domestic commodities markets, they would rearrange their prices accordingly, for the best interest of their members.

Source : hurriyetdailynews.com