On the ICE Futures U.S. Exchange, cotton futures for July delivery traded at USD0.9044 a pound during European afternoon trade, retreating 0.87%.
It earlier fell by as much as 1% to trade at USD0.9019 a pound, the lowest since April 24.
India’s Trade Minister Anand Sharma said earlier in the day that the Indian government has allowed more cotton exports during the current marketing year, as increased production and lower demand from local textile mills eased concerns over a shortage in domestic supplies.
“A decision has been taken to remove the suspension of cotton export registration,” Trade Minister Sharma said after a panel of ministers met to discuss the issue Monday.
Cotton prices soared by 4.5% on March 5, when India unexpectedly announced that it banned all cotton exports to secure domestic supplies.
While the export ban was partially lifted less than a week after it was imposed, registration for additional cargoes was not allowed until today’s decision.
India is the world’s second largest cotton producer. It is also the second biggest exporter of the fiber, trailing only the U.S. The country has so far exported 10.6 million bales in the current marketing year that began in October.
The figure is well above the government’s full-year forecast of 8.4 million bales, amid firm overseas demand, specifically from China. China accounts for more than 70% of India’s cotton exports.
Indian farmers sowed cotton to a record 12.2 million hectares in the 2011-12 season, harvesting 34.7 million bales, according to the country’s Cotton Advisory Board. Domestic consumption is expected to decline by around 6% to 25.2 million bales.
Meanwhile, cotton traders were looking forward to the U.S. Department of Agriculture’s weekly planting progress report after Monday’s closing bell.
In its last update, the USDA said 17% of U.S. cotton crops were planted as of April 23. In Texas, the largest cotton-growing state in the U.S., 23% of the cotton crop was planted, higher than the five-year average of 16% for this time of year.
The U.S. is the world’s biggest exporter of cotton and the third largest producer of the fiber, trailing only China and India.
Elsewhere, on the ICE Futures Exchange, coffee futures for July delivery dipped 0.2% to trade at USD1.7597 a pound, while sugar futures for July delivery eased up 0.05% to trade at USD0.2132 a pound.