Friday, March 9, 2012

Cotton export ban

The government of India recently banned cotton exports on grounds that declining production in the current crop season may increase prices. Banning exports is expected to assure supplies to the domestic factories. However, it may also have repercussions in the Chinese cotton markets. China, over the years, has been steadily accumulating cotton. Be it from India or rest of the world. In fact, right now China's cotton reserve is so huge that it can easily accommodate 15% of the global demand.

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