Govt bans maize export, more inflation control to follow

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New Delhi , Jul 3 : The temporary ban on maize exports may not be the last in the series of inflation control measures being planned by the government. Among the other items, the government is considering to include in the export ban list are cotton, rubber, sulphuric acid and phosphoric acid. Sulphuric and phosphoric acids are the key inputs for the fertiliser industry.

Sources said the government is mulling export curbs not only as part of measures to rein in inflation by increasing the local availability of such commodities, but also with a view to create an environment that will result in export of only value-added goods. A temporary ban would also curb speculation in prices of these items and bring in stability of costs, they added.

“These (export curbs) are circuit breakers that will result in stabilisation of prices. We are considering pre-emptive measures so that the situation does not go out of hand. There have been instances where despite a small demand-supply mismatch, the prices of certain commodities have risen much more than what was expected,” an official said.

Several sectors, including textiles, tyre, auto and fertiliser, have approached the government for placing export restrictions on their raw materials citing the rise in prices. These industries also said importing these raw materials or even making local purchases would only result in making them less competitive. The government has already imposed suspended futures trading in rubber for four months till September.

The textile sector is pushing for an export ban on cotton till this year-end, when the new crop would reach the market to help in reviewing the situation then. It said despite a better production, the local farmers do not have stocks of cotton with them and it was the foreign traders that are hoarding the commodity to push up the prices and indulge in profiteering.

According to Confederation of Indian Textile Industry, cotton exports are likely to rise to 85 lakh bales in the current year that ends September from 58 lakh bales last year. Cotton production in India is expected to surge to an all-time high of around 310 lakh bales (1 bale=170 kg) in the current year, up from about 280 lakh bales last year because of increased use of genetically modified seeds, leading to an all-time record cotton exports.