The Tamilnadu Spinning Mills Association (TASMA) has urged Union Textile Minister Giriraj Singh to ensure that the Cotton Corporation of India (CCI) sells cotton procured through the minimum support price (MSP) programme to actual user mills only till the season’s end.
In a letter to the minister, TASMA Chief Advisor K Venkatachalam said the sale of CCI’s stocks in a calibrated manner will enable the cotton textile value chain to sustain its performance, especially in export markets.
The association had represented the issue with CCI, which had asked it to confirm the lifting of stocks before July 15. As a confirmation to lift the CCI stocks would involve additional cost to the spinning mills, TASMA urged Singh to direct CCI to continue to retain the stock without selling to traders and ensure it sells only to user mills till September, the season’s end.
‘Pathbreaking initiative’
There are indications of the market picking up due to the ensuing festival season, Venkatachalam said.
Thanking the Centre for advising the CCI to sell cotton procured by it only to user mills from March 13, 2024, he said “the pathbreaking policy initiative” infused stability in cotton prices and enabled the industry to meet its export commitments. It also helped sustain the export performance of cotton textile value chain in the best manner possible.
Of the total cotton it procured, the CCI is currently holding around 20 lakh bales (170 kg each), which is only around 22 days’ consumption. “We have another three months for the new cotton to arrive in the market. To ensure the stability of cotton prices, fulfil export commitments and sustain their current performance, “it is essential to ensure the availability of home-grown cotton to the cotton spinning mills in India,” said the TASMA advisor.
India cotton deficit
Stating that India has become a “cotton-deficit country”, he said globally, all the cotton-consuming countries maintain 70 to 80 per cent of the annual cotton consumption as reserve stocks.
India had decided to maintain at least 2.5 months’ consumption, as the closing stock which works out to 65-70 lakh bales and the Committee on Cotton Production and Consumption (COCPC) Chaired by the Textile Commissioner has projected 47.38 lakh bales as the closing stock.
Considering the speculative tendency, cotton traders, taking advantage of the 11 per cent import duty on cotton, other than ELS cotton, have been adopting import parity pricing and consequently, increasing the cotton price during the off-season, Venkatachalam charged.
“This is affecting the export performance which is leading to stoppage of production by spinning mills, which would make a cascading effect on the entire textile value chain,” said the TASMA chief advisor.