July 21, 2019
Coimbatore, Jul 21 : Indian Cotton Federation (ICF) has urged Cotton Corporation of India (CCI) to release immediately the cotton lint stock held with it at the ruling market price level.
In a letter to CCI Chairman and Managing Director, Dr P Alli Rani, ICF said that member spinning mills are not getting quality cotton to meet their demand to cope up with the production of yarn and finished goods.
The trade circles have predicted lower cotton crop volume though Cotton
Advisory Board has predicted the production to be 337 lakh bales for 2018-19
season with a reasonable carry over stock, ICF president, J Thulasidhara said in the letter.
Multiple factors are affecting the cotton movement and availability of cotton
to sustain the continuity of mill consumption with no lay-off for the labour. which usually happen during this period of the season- April onwards till September-
when the supply of raw cotton becomes quite stagnant and low due to low
arrivals in the market, which not only reduces the availability of raw cotton for
the mills but also increases its prices in the domestic market, he said.
During the last few months, while international prices have fallen by over 25 per cent, Indian prices have corrected by just 5 per cent making the lndian spinners totally uncompetitive, the letter said.
Since CCI is still holding about nine lakh cotton bales and offering the same
at higher price levels than MCX and spot prices through e-auction, ICF should come forward to the rescue of Mill’s operations by offering the cotton lint stock, in support of the cotton consuming mills and with just two months to go for the current season.
“We have reliable feedback that the cotton arrival for the new season may begin
by end of October 2019 and also we would also like to bring to your kind notice the
fact that China during the off season sells a fixed quantity of raw cotton bales at a
market linked prices from their reserve, everyday, to safeguard the spinning industry,” Thulasidharan said.
ICF also requested the chairman to formulate a clear policy on pricing and sale of cotton to ensure that industry does not have to worry about getting raw cotton bales procured at MSP levels by CCI at reasonable level off-season whose advantage is taken by MCX speculators and cotton traders, the letter said.