“Export of cotton has been prohibited till further orders,” the Directorate General of Foreign Trade (DGFT) said in a notification on Monday.
This is in anticipation of price rise due to increase in demand and decrease in supply of quality cotton.
The poor quality of the present cotton crop, a rise in demand for yarn and reports of lower production are compelling exporters and domestic players to hike their purchases.
India, the world’s second-largest cotton producer, has already exported 85 lakh bales as against 70 lakh bales last year.
Textile mills consumption estimate has been revised up to 216 lakh bales for the current season from 210 lakh bales.
Cotton prices in the domestic market are hovering at about Rs 34,000-35,000 per candy (356 kg each). In March 2011, the prices hit Rs 61,000 per candy.