SIMA urges textile minister to reign in CCI’s pricing

COIMBATORE JAN 14

South India Mills Association (SIMA) has called upon the textile minister to exert control over manipulative pricing practice of Cotton Corporation of India (CCI).

Despite Textile Minister’s revamping the CCI cotton trading policy and brought uniformity in the benefits extended by CCI irrespective of volume to protect the interests of MSME spinning units, CCI continues the practice of holding the cotton in large volume and quoting higher price than the actual market price that affects the competitiveness of the actual user industry, SIMA has charged.

The Minimum Support Price (MSP) was steeply increased by 26% to 28%, CCI had to exercise MSP operation during the current season. The Government allotted Rs.2017 crores in the Union Budget 2019-20 to exercise MSP operation.

As the kapas price per quintal varies between Rs.4700/- and Rs.5250/- per quintal depending upon the quality and MSP is fixed at Rs.5550/- per quintal, CCI is covering around 50% of the cotton that arrives the market under MSP operation.

Though CCI started the procurement during November, it has started the offer only during the last week after accumulating over 35 lakh bales of cotton and quoting very high price than the actual market price.

In a statement today, Mr.Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) has tated that as China-US trade war is likely to end and also China had depleted its cotton reserves significantly during the last few years, China has geared up to import huge volume of cotton from USA and India (largest cotton producing countries in the world).

He has added that as per the market information, over 20 lakh bales of cotton have already been exported from the current cotton crop and export might reach the level of 60 lakh bales as against 50 lakh bales estimated by CAB. If the same trend continues, it may result in panic situation in the Indian cotton market, Ashwin has stated.

SIMA chief has urged theUnion Textile Minister to uphold industry friendly policies and instruct CCI to sell the cotton at market price so that the spinning mills could procure the cotton at a competitive price as mills are not able to source cotton from CCI as the price quoted by CCI is exorbitantly high when compared to the market price quoting Rs.46,000/- as the base price as against the market price of Rs.40,000/- per candy of 355 kgs.

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