The government decided to lift a ban on fresh cotton export registration on Monday to benefit farmers and it would review domestic supplies of the fibre in two weeks, commerce and textile minister Anand Sharma said.

?We have accepted the agriculture ministry?s data on cotton production. Based on the revised estimates of the Cotton Advisory Board as well as the agriculture ministry, we have decided to remove suspension on registration of cotton exports,? Sharma said after meeting agriculture minister Sharad Pawar, hours before a scheduled meeting with Prime Minister Manmohan Singh on farm exports.

Singh has called the meeting, to be attended by Mukherjee, Pawar, Sharma and food minister KV Thomas, on late Monday to defuse tension over the farm minister?s letter to him earlier this month, attacking the government?s restrictions on cotton and sugar exports despite a spike in cost of production. Earlier this month, state-backed Cotton Advisory Board (CAB) estimated production at 34.7 million bales for 2011-12, while the agriculture ministry has projected higher output at 35.2 million bales. However, the CAB estimated that year-ending stocks of 2.5 million bales ? sufficient for domestic consumption of just over one month ? even if no fresh shipment is allowed.

The government has already allowed a record shipment of 11.5 million bales so far. The country harvested around 33 million bales last year and shipped around 7.8 million bales.

Although the textile ministry was in favour of allowing fresh licences up to two million bales to balance the interest of farmers with textile mills, Pawar stick to his stance of complete removal of restrictions on cotton trade.

The latest move effectively capped the friction between the ministries of commerce and textiles, and agriculture since cotton export was first banned on March 5. The commerce ministry banned the fibre?s exports to conserve the raw material for cash-starved textile mills for off-season use and avoid a depletion of stocks, after licences were sought to ship an unprecedented 13 million bales.

Cutting across party lines, cotton-growing states, such as Gujarat and Maharashtra, criticised the ban. Congress MPs from Gujarat, led by Ahmed Patel, political secretary to UPA Chairperson Sonia Gandhi, had recently met the Prime Minister to seek removal of ban to benefit farmers. BJP leader and Gujarat chief minister Narendra Modi also flayed the centre for its decision to curb cotton exports.

Pawar also voiced strongly against the ban, arguing that farmers? income would dwindle due to a resultant fall in domestic prices, while Sharma had said it was better to restrict cotton exports than having to import the raw material at hefty prices later. He complained to the Prime Minister that he was ?kept in the dark? about the ban, prompting Singh to direct an urgent review of the decision by the informal GoM.