Quoting Higher Prices for Cotton

Textile Mills Blamed Cotton Corporation of India (CCI)

GMT 12:36 2015 Saturday ,17 October

Sriyadithatextile - Textile Mills Blamed  Cotton Corporation of India (CCI)

Cotton
Courtesy Google

COIMBATORE: Textile mills in the region have blamed state-run Cotton Corporation of India (CCI) for quoting higher prices. They have also said that CCI did not release quality cotton for more than two months which has affected the user industry adversely.

The Southern India Mills' Association (SIMA) said that CCI was always quoting prices that were much higher than the actual market rates and sought union textile ministry's intervention on the issue. Alleging that during the 2014-15 season (October-September), CCI procured the entire volume of good quality cotton grown in Telangana, Andhra Pradesh and parts of Maharashtra and did not release them for more than two months, SIMA chairman M Senthil Kumar said that because of this actual users were made to suffer.

During the 2008-09 season, CCI offered bulk discount to a few traders and made the industry pay Rs2,000-Rs4,000 more for home-grown cotton, he said. CCI adopted the same policy in 2014-15, making the small and medium sized mills pay Rs.500-Rs1000 to the traders for procuring the required cotton, he said.

Though CCI started offering smaller lots after the intervention of the ministry, suspension of cotton sales by it in March and April made regular users of Telangana, Andhra Pradesh and Maharashtra cotton suffer seriously, Senthil Kumar stated.

"CCI should avoid quoting higher benchmark price which results in speculation and e-auction should be left to market forces. CCI should also sell the cotton seeds by e-auction and follow fair cotton seed trading policy," he said.

As global cotton exports came down drastically due to the Chinese cotton policy, India, which has emerged as the largest producer of cotton, started holding more stocks. CCI had to exercise MSP (minimum support price) operations during 2014-15 and also 2015-16 as the market prices ruled lower than the MSP prices, Senthil Kumar said.

"Any short-sighted policy would only aggravate the ailing textile industry, resulting in serious financial stress," SIMA said in its representation to union textiles minister Santosh Kumar Gangwar. CCI, which played a major role in sale of the seed, often sold them at lower prices, affecting the kappas price and its procurement by the regular ginners, Senthil Kumar alleged.

Stating that CCI's practice led to speculation, SIMA urged the ministry to direct CCI to have a transparent and fair cotton trading policy.

The minister should take remedial measures, enabling the textile industry to source the raw material at international prices and remain competitive in the open market, the SIMA chairman said.

The Southern India Mills' Association (SIMA) said that CCI was always quoting prices that were much higher than the actual market rates and sought union textile ministry's intervention

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