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India lifts cotton ban

India has lifted a month-long ban on cotton exports in a move that is expected to ease the effects of a worldwide cotton shortage.

The Indian government implemented a ban on raw cotton exports on April 19 in a bid to lower domestic cotton prices, following shortages in the country that had been caused by unusually high exports.

Although India has now lifted the complete ban, it has retained control of its cotton exports by demanding that exporters apply for a licence.

Cotton exporters have welcomed the lifting of the ban. BJ Kedia, owner of a cotton exports company based in Mumbai told WWD: “This is great news. The ban was hurting farmers and buyers around the world. Now we expect to see business improve fast.”

However, Dhiren Sheth, president of the Indian Cotton Association, said he was waiting until it became clear how the Indian government would award licences before he approved the move

“Cotton was once on a free exports list, now it has been shifted to a restricted list,” he told WWD. “We are awaiting further clarification on what exactly this means.”

India is understood to have replaced the US as the biggest exporter of cotton during the first two months of 2010 after China bought a record 265,460 tonnes of Indian-grown cotton, almost 17 times what the country had purchased a year earlier.

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