Price of Indian cotton jumps on strong demand

Govt allows export of 2.5m bales despite deadline expiry.

MUMBAI: Cotton prices in India jumped on Wednesday as exporters bought aggressively after the government said it will still allow exports of 2.5 million bales, despite the expiry of a December 15 deadline, exporters said.

Prices of the most common Shankar-6 variety rose by Rs900 to Rs43,000 ($952.8) per candy (356 kg) on Wednesday.

Trade Minister Anand Sharma said on Tuesday that India - the world’s second-biggest producer of cotton - would allow exports in 2010-11 of the 2.5 million bales that exporters have failed to ship so far.

India, which is also the world’s second-biggest exporter of cotton, had given permission for exports of 5.5 million bales in the year that began on October 1, but had asked exporters to ship the entire quantity from November 1 to December 15.

Exporters managed to ship only about three million bales by the deadline as unseasonal rains in October and November delayed arrivals of bales at domestic markets.

Published in The Express Tribune, December 23^rd, 2010.