In an unexpected move government has given a surprise to cotton manufacturers, exporters and traders by banning exports.
Directorate General of Foreign Trade (DGFT) said even exports of cotton for which registration certificates have been issued will not be allowed. It is estimated that Cotton production this season ending September will be a record of 35.5 million bales as against 32.5 million bales in previous years.
Industry players are more surprised by the timing at which such a ban is coming into effect as cotton prices are ruling low. Prices of Shankar 6, which is mainly in demand for exports, ruled in 34800-35000 a candy. Today’s action will result in crash in prices and a rough estimate indicates 
that the export of approx 3-3.5 million bales will now be affected due to this ban.
Some of the issues which are faced locally by Textile mills, particularly south based (Tamil Nadu), is the shortage of power and this ban will make the situation more tricky.
The repercussions and the fallout on the government actions – banning of cotton exports, can be serious.
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