India likely to lift cotton export ban to woo farmers .

NEW DELHI: In a view to woo suffering farmers from the cotton export ban, the Indian government is considering lifting export ban but will continue revised tax on export, reported Dow Jones Newswires quoting two officials from the respected ministry.

Last month, India raised the tax on cotton export and later banned the new contract registration, taking continued plea of local textile mills about higher price for the raw cotton due to the large scale export.

After the ban, the domestic prices of cotton declined significantly to Rs 27,700 ($606.65) per candy of 356 kg as of April 30 from Rs 28,200 on April 19. This, however, affected the domestic cotton farmers. They cried for the better prices for their produce.

In order to maintain a balance between the interests of farmers as well as of domestic mills, the government is unlikely to lift the imposed tax on cotton exports, the officials said.

Indian traders had signed contracts to export more than 8.5 million bales of cotton in the current marketing year through September before the ban was imposed. The country last year shipped 3.5 million bales, each weighing 170 kilograms.

Meanwhile, India, which is also the world's second-largest cotton grower, expects to produce 29.2 million bales in 2009-10.

ICE July cotton prices on April 20 soared to their highest levels since September 2008, reaching 84.16 cents a pound as traders scrambled to secure cotton on news of the Indian export ban.

Source :  Commodity Online