Coimbatore: In a Press Release issued here today, Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) has urged the Union Textile Minister, Smriti Zubin Irani to intervene in the Cotton Corporation of India (CCI) cotton trading policies and direct CCI to avoid holding the cotton and sell the cotton at market price on a regular basis to arrest price escalation.
Coimbatore: In a Press Release issued here today, Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) has urged the Union Textile Minister, Smriti Zubin Irani to intervene in the Cotton Corporation of India (CCI) cotton trading policies and direct CCI to avoid holding the cotton and sell the cotton at market price on a regular basis to arrest price escalation.
The SIMA President has stated that China has geared up to import huge volume of cotton from USA and India (largest cotton-producing countries in the world), as China-US trade war is likely to end and China has depleted its cotton reserves significantly, during the last few years.
Ashwin has pointed out that industry-friendly cotton trading policy by CCI would not only facilitate to mitigate the current challenges but also would enable the industry to grab the market opportunities in the aftermath of US-China holding talks to end the trade war shortly.
He has added that as per the market information, over 20 lakh bales of cotton have already been exported from the current cotton crop and export might reach the level of 60 lakh bales, as against 50 lakh bales estimated by CAB.
"If the same trend continues, it may result in panic situation in the Indian cotton market. Hence, the Union Textile Minister should instruct CCI to sell the cotton at market price so that the spinning mills could procure the cotton at a competitive price", said the SIMA President.
He noted that mills are not able to source cotton from CCI, as the price quoted by CCI is exorbitantly high when compared to the market price quoting Rs.46,000/- as the base price as against the market price of Rs.40,000/- per candy of 355 kgs.
The predominantly cotton-based Indian textile industry often faces a crisis due to volatility in cotton prices. Apart from the multinational cotton traders, who cover cotton in large volume during peak season, hoard the cotton and speculate the prices, the cotton trading policy of Cotton Corporation of India (CCI) also often aggravates the market. Soon after assuming charge, Union Textile Minister, Smriti Zubin Irani revamped the CCI cotton trading policy and brought uniformity in the benefits extended by CCI irrespective of volume to protect the interests of MSME spinning units, according to the release.
"However, the CCI continues the practice of holding the cotton in large volume and quoting higher price than the actual market price that affects the competitiveness of the actual user industry", said the SIMA President.
The release further noted that the Minimum Support Price (MSP) was steeply increased by 26% to 28%, CCI had to exercise MSP operation during the current season. The Government allotted Rs.2017 crores in the Union Budget 2019-20 to exercise MSP operation. As the kapas price per quintal varies between Rs.4700/- and Rs.5250/- per quintal depending upon the quality and MSP is fixed at Rs.5550/- per quintal, CCI is covering around 50% of the cotton that arrives the market under MSP operation.
Though CCI started the procurement during November, it has started the offer only during the last week after accumulating over 35 lakh bales of cotton and quoting very high price than the actual market price, said the SIMA release.
The SIMA President has stated that China has geared up to import huge volume of cotton from USA and India (largest cotton-producing countries in the world), as China-US trade war is likely to end and China has depleted its cotton reserves significantly, during the last few years.
Ashwin has pointed out that industry-friendly cotton trading policy by CCI would not only facilitate to mitigate the current challenges but also would enable the industry to grab the market opportunities in the aftermath of US-China holding talks to end the trade war shortly.
He has added that as per the market information, over 20 lakh bales of cotton have already been exported from the current cotton crop and export might reach the level of 60 lakh bales, as against 50 lakh bales estimated by CAB.
"If the same trend continues, it may result in panic situation in the Indian cotton market. Hence, the Union Textile Minister should instruct CCI to sell the cotton at market price so that the spinning mills could procure the cotton at a competitive price", said the SIMA President.
He noted that mills are not able to source cotton from CCI, as the price quoted by CCI is exorbitantly high when compared to the market price quoting Rs.46,000/- as the base price as against the market price of Rs.40,000/- per candy of 355 kgs.
The predominantly cotton-based Indian textile industry often faces a crisis due to volatility in cotton prices. Apart from the multinational cotton traders, who cover cotton in large volume during peak season, hoard the cotton and speculate the prices, the cotton trading policy of Cotton Corporation of India (CCI) also often aggravates the market. Soon after assuming charge, Union Textile Minister, Smriti Zubin Irani revamped the CCI cotton trading policy and brought uniformity in the benefits extended by CCI irrespective of volume to protect the interests of MSME spinning units, according to the release.
"However, the CCI continues the practice of holding the cotton in large volume and quoting higher price than the actual market price that affects the competitiveness of the actual user industry", said the SIMA President.
The release further noted that the Minimum Support Price (MSP) was steeply increased by 26% to 28%, CCI had to exercise MSP operation during the current season. The Government allotted Rs.2017 crores in the Union Budget 2019-20 to exercise MSP operation. As the kapas price per quintal varies between Rs.4700/- and Rs.5250/- per quintal depending upon the quality and MSP is fixed at Rs.5550/- per quintal, CCI is covering around 50% of the cotton that arrives the market under MSP operation.
Though CCI started the procurement during November, it has started the offer only during the last week after accumulating over 35 lakh bales of cotton and quoting very high price than the actual market price, said the SIMA release.