The Southern India Mills’ Association (SIMA) has said through a press release that the 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.
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.
Ashwin Chandran, Chairman, (SIMA) urged Minister Smriti Irani to intervene in the CCI cotton trading policies and direct CCI to avoid holding the cotton and sell the cotton at market price on a regular basis to arrest price escalation.
He stated 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. 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.
SIMA chief has urged Minister Smriti to instruct CCI to sell the cotton at market price so that the spinning mills could procure the cotton at a competitive price. He has added that 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.
Ashwin has pointed out that industry friendly cotton trading policy by CCI would not only facilitate to mitigate the current challenges, but also would enable the industry to grab the market opportunities in the aftermath of US-China holding talks to end the trade war shortly.