The Tamilnadu Spinning Mills Association (TASMA) has urged Union Textile Minister Giriraj Singh to ensure Cotton Corporation of India (CCI) sells cotton procured through the minimum support price (MSP) programto actual user mills only till the season’s end.
In a letter to the minister, K Venkatchalam, Chief Advisor, TASMA said, the sale of CCI’s stocks in a calibrated manner will enable the cotton textile value chain to sustain its performance, especially in export markets.
TASMA urged Singh to direct CCI to continue to retain the stock without selling to traders and ensure it sells only to user mills till September, the season’s end.
Of the total cotton procured by it, CCI currently holds around 20 lakh bales (170 kg each), which is only around 22 days’ consumption. To ensure the stability of cotton prices, fulfill export commitments and sustain their current performance, it is essential to ensure the availability of home-grown cotton to the cotton spinning mills in India, adds Venkatchalam.
Stating that India has become a ‘cotton-deficit country,’ he said globally, all the cotton-consuming countries maintain 70 to 80 per cent of the annual cotton consumption as reserve stocks.
India had decided to maintain at least 2.5 months’ consumption, as the closing stock which works out to 65-70 lakh bales and the Committee on Cotton Production and Consumption (COCPC) Chaired by the Textile Commissioner has projected 47.38 lakh bales as the closing stock.
Considering the speculative tendency, cotton traders, taking advantage of the 11 per cent import duty on cotton, other than ELS cotton, have been adopting import parity pricing and consequently, increasing the cotton price during the off-season, Venkatachalamalleges.
This is affecting the export performance which is leading to stoppage of production by spinning mills, which would make a cascading effect on the entire textile value chain, he adds.
