India: Textile industry wants Govt to release procured cotton to stabilise prices

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NEW DELHI, MARCH 5:

Worried over rising cotton prices, the Confederation of Indian Textile Industry (CITI) has urged the Government to release the fibre commodity procured by various agencies under the minimum support price operations.

In a letter addressed to the Union Minister of Textiles, Anand Sharma, CITI attributed the recent increase in prices to the artificial shortage created partly by hoarding of cotton by traders and partly due to the non-release of procured cotton by the Cotton Corporation of India and other procurement agencies.

S.V. Arumugam, Chairman, CITI, pointed out that the current stock of close to 25 lakh bales have been procured through the MSP route a few weeks ago, after which prices have risen by about 12-15 per cent.

Thus, releasing the procured quantities now can fetch an impressive profit for the procured agencies.

Procuring cotton at MSP, when the market prices were lower gave the requisite protection to cotton farmers. However, holding on to the procured cotton would help only traders who are also hoarding cotton purchased from the farmers earliest at low prices, Arumugam said.

India’s cotton production in the current year is estimated at 33.80 million bales of 170 kg each over last year’s 35.2 m bales. The domestic consumption is pegged at 26 million bales, leaving an export surplus of around 8 million bales.

The CITI chairman further pointed out that a substantial part of the crop has already arrived in the market and therefore, increase in cotton prices now will help farmers only marginally. Stating that the textiles industry was finding it difficult to pass on the increased cotton prices to the consumers, Arumugam urged the Government to immediately release the procured cotton, which would also force the traders to release cotton held by them.

Source: Business Line

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