â– Seek textile ministry’s intervention, want cotton body to declare selling prices
R Ravichandran Chennai, Feb 25
THE Southern India Mills Association( SIMA)on Monday said that cotton prices have started rising abruptly in the last 10days even though international prices have remained firm for the last one month.
The association has claimed that this is possibly due to hoarding of the commodity by some big traders who have started speculating on prices. It has sought the union textile ministry’s immediate intervention in terms of taking action against the hoarders and requested the ministry to direct the Cotton Corporation of India(CCI) to announce selling prices of the commodity in the domestic market.
“Sustenance of a conducive business environment for the textile industry is the need of hour with respect to cotton policies,” said S Dinakaran, chairman, SIMA. According to Dinakaran, Cotlook A index price per pound has been varying between 85 to 89 cents during the last one month whereas Sankar-6 cotton price, which was around R34,000 per candy of 355 kg during the beginning of February, is now ruling at R36,500.
“The main reason for the abnormal hike in price is hoarding of cotton by some major traders. Moreover, the Cotton Corporation of India has been delaying the announcement of prices for varieties such as MCU-5 and delaying their trade in the domestic market in full swing, which has added fuel to the fire.”
“The abrupt increase in cotton prices has sent wrong signals to the international market and the demand for Indian cotton yarn and fabrics has started declining in recent days. The upward trend in domestic cotton price has already made many textile mills to resort to imports, which might affect Indian farmers,” he added.
The SIMA chief said that CCI has procured large volumes of cotton in Andhra Pradesh (to the tune of 20 lakh bales), particularly the long staple varieties including MCU-5. Since these varieties are available in limited quantity, it should be ensured that they reach the domestic mills and, particularly, the woven garment and made- up sectors that need this type of cotton specifically to meet their export commitments.
Therefore, said Dinakaran, the union textile minister should direct CCI to immediately announce prices for the AP cotton varieties, particularly MCU-5, to avoid panic in the minds of spinners and downstream sectors.
He also wanted the government to ensure that CCI cotton is made available to the domestic sector and exports are avoided so that the Indian textile industry remains globally competitive. According to Dinakaran, after a prolonged recession, the textile industry started reviving only from the middle of 2012 and the reason for the improvement in performance was the stability in cotton prices and availability of quality cotton.
While expressing satisfaction over the debt restructuring package of R35,000 crore and various incentives offered by the government, he requested the textile minister to intervene in CCI’s cotton-selling policy. Around 55 lakhs bales of cotton have already been registered and around 33 lakh bales of cotton have already been shipped out of the country so far.
(Source: Financial Express)