Nowadays, as soon as news editors approve the final copy of articles about Indias export policy on cotton, the Indian government flips its stance on the issue, warranting fresh space in the next days edition as well.

But the plight of news editors everywhere pales in comparison to the heart ache caused by the Indian government to international buyers that have made deals with Indian cotton exporters.

Citing diminishing supplies to the local textile sector, the Indian government announced a complete ban on the export of raw cotton, on March 5, 2012.

The governments intervention drew swift and vociferous opposition, not only from the countrys agriculturists, but also from the Federal Governments coalition partners.

Moving quickly to limit the backlash, Indian Commerce Minister Anand Sharma announced on Sunday that the government had decided to lift the export ban.

However within 24 hours, the countrys Commerce Secretary clarified that those export orders that have already been registered but are awaiting shipment, will be allowed shipment while no new export consignments shall leave the countrys shores.

The impact of Indian flip flopping on international cotton markets has been muted so far, thanks largely to excess global supplies and less than ideal levels of production in the textile industry across the globe.

But appearances can be misleading.

Although international cotton prices have not exhibited any significant volatility as a consequence of this fiasco, experts opine that international buyers have been forced to reconsider their reliance on India for raw cotton supplies.

While some may consider this an alarmist view, market pundits highlight that the lack of commitment to international buyers is becoming a regular feature of that countrys suppliers and policy makers alike.

Last year, many Pakistani textile players were among scores of international buyers that were left high and dry by Indian cotton sellers.

At that time it was not the government, but the private sellers themselves who willfully defaulted on export orders as they hoped to snag even sweeter deals from other buyers.

Even after Indian sellers backed out of lucrative deals, buyers from Pakistan renegotiated deals as high as $2 per pound.

Yet exporters from across the border did not fulfill their promises.

When a high level delegation from India met with businessmen in Karachi on February, they received a watered down response from the textile industry whose representatives cited this mess up as a major reason for their apprehensions towards enhanced trade with India.

Now, as the Indian government adds to the uncertainty surrounding that countrys willingness and ability to meet cotton export orders, international buyers are sure to be weighing their options to ensure smooth sailing in the future.
BR RESEARCH