Worried over rising cotton prices, the Confederation of Indian Textile Industry (CITI) has urged the Government to release the commodity procured by various State agencies under the support price mechanism.
In a letter to Union Minister of Textiles Anand Sharma, CITI attributed the recent increase in prices to artificial shortage created partly by hoarding of cotton by traders and due to the non-release of procured cotton by the Cotton Corporation of India (CCI) and other procurement agencies.
S.V. Arumugam, Chairman, CITI, said the current stock of close to 25 lakh bales had been procured through the minimum support price (MSP) route a few weeks ago, after which prices have risen by about 12-15 per cent.
Thus, releasing the procured quantities could now fetch an impressive profit.
Procuring cotton at MSP, when the market prices were lower, gave requisite protection to cotton farmers.
However, holding on to the procured cotton would help only traders, who are also hoarding cotton purchased from the farmers at low prices, Arumugam said. The country’s cotton production in the current year is estimated at 33.80 million bales of 170 kg each over last year’s 35.2 m bales.
Domestic consumption is pegged at 26 million bales, leaving an export surplus of around eight million bales.
The CITI Chairman said a substantial part of the crop had already arrived in the market and, therefore, an increase in cotton prices now would help farmers only marginally.
Stating that the textiles industry was finding it difficult to pass on the increased cotton prices to consumers, Arumugam urged the Government to immediately release the procured cotton, which would also force the traders to release cotton held by them.