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May 14, 2009

Textile mills’ concern over cotton price

Textile mills here have expressed concern over the cotton price fluctuation in the domestic market.A release from the Confederation of Indian Textile Industry (CITI) said that with the Union Government increasing the minimum support price of cotton by over 40 per cent this year, domestic mills found it difficult to keep up cotton purchases. Hence, nearly half the cotton that came to the market during the current cotton season was purchased by government agencies, such as the Cotton Corporation of India (CCI) and the National Agricultural Cooperative Marketing Federation of India (NAFED).

The industry sought a special financial assistance scheme to help the mills procure cotton. The Government announced a discount of up to Rs. 650 a candy for bulk purchase of cotton from the CCI. It also announced a five per cent export incentive with effect from April 1, 2008. K. V. Srinivasan, Chairman of the Southern India Mills’ Association, said these measures mainly benefited the traders. He said that for those who were unable to procure cotton in bulk quantities, the price fluctuation was a major concern. The small and medium-scale mills should benefit from the discount. It was reported that the CCI had exhausted the stock with it. The NAFED should extend uniform discount so that all mills benefited. Mr. Srinivasan said the Government should also hold meetings with the industry before deciding the minimum support price for the next season. (Cotton arrivals would start in September.)

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