The Union agriculture ministry said that India’s wheat production in 2011-12 is expected...
The International Cotton Association has urged the Indian minister of commerce and industry to immediately reconsider its policy and revoke the ban with immediate effect to enable international contracts to be executed without further defaults and reputational damage
New Delhi: Expressing dismay over India’s decision to ban cotton exports, the International Cotton Association (ICA) on Wednesday said the move will have “serious consequences” on world cotton trade.
The government on 5th March has banned exports of cotton.
“As the second largest producer and consumer of cotton in the world, with a world market share of about 20% and one of the largest exporters of global cotton, the ICA believes that the actions taken by India will have serious consequences and a major, detrimental impact on world cotton trade,” the ICA said in a statement.
The international cotton trade association claims that the suspension of registration of cotton export contracts in 2010 by India has led to numerous arbitrations at the ICA, as many firms, including from India, were unable to execute their contracts.
It said that the ramifications of the 2010 ban led to a huge disruption of trade, with many firms having to pay out large sums of money as a consequence of arbitration awards against them.
“...the current ban will produce the same results and, once again, undermine India as a reliable trading partner,” it said, adding the ban has already sparked an up move in New York Futures cotton prices.
The association said that the impact of this ban may be more severe, as it includes registered contracts.
“Customers in many importing countries who are counting on this cotton to run their spinning mills will suffer irreparable loss and damages,” it added.
ICA has urged the Indian minister of commerce and industry to immediately reconsider its policy and revoke the ban with immediate effect to enable international contracts to be executed without further defaults and reputational damage.
The UK-based association operates on a not-for-profit basis.
“We will take a call after the RBI’s policy review. At the moment, liquidity is tight and perhaps one will like to assess the overall situation before taking a decision (on slashing rates),” chairman and managing director of Bank of Baroda, MD Mallya told reporters
Mumbai: Public sector lenders Bank of Baroda and Union Bank of India on Wednesday said they would take a call on slashing interest rates in specific segments once the Reserve Bank of India (RBI) has announced its mid-term policy review, reports PTI.
“We will take a call after the RBI’s policy review. At the moment, liquidity is tight and perhaps one will like to assess the overall situation before taking a decision (on slashing rates),” chairman and managing director of Bank of Baroda, MD Mallya told reporters here.
He was speaking on the sidelines of the fourth Annual Credit Information Conference organised by Credit Information Bureau of India (Cibil).
Mr Mallya also said that unless the cost of raising resources came down, it would be difficult to pass on the benefits to end-users.
The chairman of Union Bank echoed similar sentiment.
“We will have a look at our Net Interest Margin (NIM). If it improves substantially, we will look at (rate cut) in some of the products. Based on that, we will take a call,” chairman and managing director of Union Bank of India, MV Nair said.
Union Bank of India was the first bank to slash its base rate by 10 basis points to 10.65% after the policy review by the apex bank on 16 December 2011.
Referring to tight liquidity situation and expectation from upcoming mid-term review, Mr Mallya said he was expecting some relaxation.
“Liquidity is by and large tight in the last few weeks. May be with the advance tax payout, liquidity will remain tight for some time. Market expects a CRR (cash reserve ratio) cut... Let’s see,” Mr Mallya said.
He, however, declined to speculate on the quantum of CRR cut likely to happen in the next policy review.
Presently, banks are borrowing around Rs1.5 lakh crore a day from the repo window, which is much above the comfort level of the central bank of around Rs60,000 crore.