India has once again banned cotton exports, and the action immediately pushed U.S. cotton futures prices higher. According to Ravi Singh, analyst at SMC Global Securities, “The ban came as India’s export target estimates were met. It was also to ensure that India has enough cotton available locally.”
The ban, the second in two years, was announced by India’s Directorate General of Foreign Trade.
A notification on the DGFT’s Web site said, “Export of cotton has been prohibited till further order. Further export against registration certificated already issued will not be allowed.”
India last banned cotton exports in April 2010 and lifted the ban the same year.
After the ban was announced, cotton futures for May 2012 delivery surged 400 points to 92.23 cents, while December 2012 futures rose 326 points to 93.18 cents.