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Today Date : Sunday, July 21, 2024

Cotton Price dips: SIMA hails  Minister's action

Cotton Price dips: SIMA hails Minister's action

Mr.Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA) has appreciated the proactive and bold steps taken by the Union Minister of Textiles to control the speculation in the cotton trading by directing SEBI and MCX to bring necessary changes so as to enable the cotton futures trading to benefit all the stakeholders in the cotton textile value chain and protect the jobs of 35 million people directly employed in the cotton textile value chain and also around 6.5 million cotton farmers. 

In a release, he stated that MCX cotton price per bale (of 170 kgs) that prevailed around Rs.50,000/- till the last week of August, has now come down to Rs. 36,480/-, a reduction of around 27%.  With the early arrival of new cotton and price pressure, the domestic market cotton price has also reduced from the level of Rs.1,00,000/- to Rs.90,000/- per cany (355 kgs), a reduction of around 10%. He said  that the Indian cotton prices are still higher by 15% to 20% when compared to the international cotton prices especially the countries like Pakistan and China.

The domestic price must match with the prices prevailing in the competing countries and the international cotton prices to have a level playing field and enable the Indian cotton textile industry to revive from the unforeseen crisis. 

He hoped that with the 8% increase in cotton area and numerous steps taken to prevent the infestation of pink boll worm, white fly and curly leaf cotton diseases, the cotton production for the coming season might be comfortable for the industry to bounce back in a short span of time.  The cotton requirement by the industry would surpass the production and with the duty-free export of cotton that might encourage 12% to 15% of good quality raw cotton export from the country during the season resulting in cotton shortage during the off season. 

He has appealed to the Government to remove 11% import duty to enable the industry to achieve its potential growth rate and sustain its financial viability apart from protecting the jobs of over 35 million people employed in the cotton textile value chain.  

He has added that the anticipated cotton price even during the peak cotton season would be much higher than the minimum support price and therefore, the duty removal will not affect the farmers.  He has stated that the Government could also consider levying the duty only during the peak arrivals of the season (December - March) to avoid recurrence of crisis during the fag end of cotton season 2022-23.

He has appealed to the Government to ensure raw material security and ensure availability of quality cotton at an internationally competitive rate by curbing speculation and removing the import duty on cotton.