COIMBATORE
With prices of the widely used Sankar-6 cotton increasing 7.3% since the beginning of this month, textile mills in the region have urged the textile minister to direct the state-run Cotton Corporation of India (CCI) to declare procurement prices.
Though the main reason for the hike in prices is the hoarding of cotton by certain major traders, the delay by CCI in announcing prices for varieties such as MCU-5 has only worsened the situation, Southern India Mills' Association (SIMA) chairman S Dinakaran said. Prices of Sankar-6, which were around Rs 34,000 a candy (355 kgs) during the beginning of February, are now ruling at Rs 36,500, he said.
The upward trend in domestic cotton prices has already resulted in many textile mills resorting to imports, which would affect Indian farmers, he said. International cotton prices have been quite stable. Cotton is quoting between 85 cents and 89 cents a pound on the Cotlook A index.
The abrupt increase in cotton prices has sent wrong signals to the international market and the pace of demand for Indian cotton yarn and fabric has started to decline in the recent days, Dinakaran said. CCI usually announces a minimum support price for cotton and commences buying operations to support farmers every year.
CCI has procured cotton to the tune of 20 lakh bales (a bale is 170 kgs), especially the long-staple varieties such as MCU-5, in Andhra Pradesh (AP), the SIMA chairman said. Since these varieties are available only in limited quantity, it should be ensured that they reach the domestic mills, he said.
CCI should announce the prices for cotton varieties, particularly MCU-5, immediately to avoid panic in the minds of spinners and the downstream sectors, Dinakaran said. The government should ensure that CCI cotton is made available to the domestic sector, he said. CCI usually announces a minimum support price for cotton and commences buying operations to support farmers every year. (Source : The Times of India)