Indian cotton shipments will resume for previously registered sales, but the government ban on new cotton exports will remain in effect until a review within the next two weeks.
The ban stands lifted as of this morning. There are huge bunches of registrations; those would be scrutinized and revalidated, Commerce Secretary Rahul Khullar said Monday.
Previously registered cotton shipments will be allowed to be exported under government review. There are roughly 3.5 million bales of orders currently registered, the BBC reported.
Scrutiny and revalidation is to make sure that there is no fictitious transcaction, Khullar said, explaining why the government will review previously made cotton sales.
India is the world's second largest cotton producer, and China is India's largest cotton buyer. The Indian government's ban on cotton exports has been particularly criticized by Chinese trade organizations.
Since the year 2010, consecutive cotton export restriction policy from Indian government has not only caused Chinese firms large and undeserved financial losses, but also violated international cotton trade order. The distortion of international cotton price caused by human factors brings high risks and huge losses to textile firms and cotton dealers, also to Indian domestic cotton farmers and exporters as well, the China Cotton Association said on March 8, three days after the ban went into effect.
The ban was also protested by Indian Minister of Agriculture Sharad Pawar and some chief ministers in Maharashtra and Gujarat.
However, Khullar has defended the ban on cotton exports, 85 percent of which go to China, by decrying stockpiling of cotton outside of India.
Cotton futures have dropped more than 50 percent in New York during the past year, according to Bloomberg News.
The Indian government put a ban on cotton shipments when sales exceeded the available government estimated surplus. Sales reached 9.5 million bales, exceeding the 8.4 million bale surplus estimated by the government, Bloomberg News reported.