Commodity prices and Trade Policy Challenges - Part II
In the last blog , I talked about how increasing global commodities prices might put pressure on government to lift the export ban in order to take advantage of international prices. We are seeing this pressure for cotton and sugar now a days. There is a meeting scheduled tomorrow , headed by Prime minister to sort out the issue. Let's take up cotton as an example. We are one of the top producers. And second largest exporters of cotton in 2011, behind US. Interestingly, China absorbs all its domestic cotton in textile manufacturing. They even import from us and others. And China protested when we banned the cotton exports! I would have loved to plot international price movement vs Indian spot prices for cotton. However, I see that though I can get time series for both Memphis and Cotton A index internationally, when it comes to India prices, it is difficult to obtain. The MCX spot prices are in rupees and I am not sure about the conversion to dollars per tonne, given the