“We are finalising the draft Cotton Trade ( Development and Regulation) Bill, 2012. The proposed law will help in drawing realistic cotton balance sheet,” a senior Textiles Ministry official said.
The new law has been drafted against the backdrop of differences in cotton output estimates made by the Textiles Ministry and Agriculture Ministry for this crop year.
The ban on cotton exports that was imposed on fears of domestic shortages despite record output in the absence of accurate data, lasted only a week.
The Textile Ministry has drafted the new legislation as at present there is no statutory framework for collecting the statistical data on cotton from ginning and pressing factories as well as cotton yarn output from the textiles mills.
Due to lack of realistic data, it has become difficult for the Cotton Advisory Board (CAB) to assess the production and consumption of raw cotton, the official added.
The CAB, which functions under the Textiles Ministry, had in January estimated a crop size of 34.5 million bales, but had to adjust its figures to the projection made by the Agriculture Ministry at 34 million bales.
In view of the commercial importance of cotton crop, the senior official said: “The trade and commerce in cotton and its value-added products need to have a progressive national legislation for promotion, development and effective regulation of cotton.”
The proposed bill seeks to ensure well-structured supply chain for cotton, textiles and facilitate better management of statistical data collection for more effective planning and policy formulation, the official said.
Pointing out that there is no legislative support against the price manipulators, he stressed that there was a need for a statistical monitoring mechanism for assessing production and consumption of raw cotton.
In the last few days, cotton prices have jumped over 5 per cent to Rs 35,000 per candy.
The proposed law can integrate with the “Collection of Statistics Act, 2008” to assess consumption of raw cotton in the country, the official added.