Govt Must Pro­cure 100 lakh Bales of Cot­ton to Sta­bilise Prices: Trade

The Economic Times - - Finance & Commodities - Jayashree.Bhos­ale@ times­

Pune: Spin­ning mills and tex­tile pro­duc­ers have urged the gov­ern­ment to pro­cure a quar­ter of the do­mes­tic cot­ton pro­duc­tion, say­ing the move will shield them from hoarders and help them get the raw ma­te­rial at rea­son­able rates. lndia is likely to re­tain its po­si­tion as the world’s largest pro­ducer of cot­ton this year, with the In­dian Cot­ton Fed­er­a­tion (ICF) say­ing pro­duc­tion could touch 40 mil­lion bales. How­ever, a bumper crop of­ten leads to big traders hold­ing more stocks and push­ing up prices dur­ing the off sea­son, ICF pres­i­dent J Thu­lasid­ha­ran said, adding that farm­ers suf­fer too, as they get lower prices for their pro­duce.

“In­dia will have a record crop of 400 lakh bales this year and with mill con­sump­tion will be round 300 to 310 lakh bales. Hence, Cot­ton Cor­po­ra­tion of lndia should be ad­vised to act New lndia is likely to re­tain its po­si­tion as world’s largest cot­ton pro­ducer Rea­sons for rise in pro­duc­tion: 20% in­crease in acreage Favourable cli­matic con­di­tion as sta­biliser for prices and pro­cure around 100 lakh bales dur­ing the peak sea­son and make it avail­able for the con­sum­ing mills dur­ing off sea­son,” said Thu­lasid­ha­ran. The gin­ning and spin­ning in­dus­try claims it is fac­ing a liq­uid­ity cri­sis. “Due to over­sup­ply in do­mes­tic and global mar­kets and due to liq­uid­ity is­sues, there would not be suf­fi­cient buy­ers in the mar­ket, which would af­fect cot­ton farm­ers due to very low prices for their pro­duce,” said Thu­lasid­ha­ran.

ICF said, “Dur­ing cot­ton sea­son 2017-18, due to 20% in­crease in acreage and favourable cli­matic con­di­tion, an all-time high cot­ton pro­duc­tion of about 400 lakh bales is ex­pected. As per lnter­na­tional Cot­ton Ad­vi­sory Com­mit­tee’s re­port, a sim­i­lar sit­u­a­tion is ex­pected in other cot­ton grow­ing coun­tries, re­sult­ing in 75% sur­plus cot­ton glob­ally.”

Cot­ton ar­rivals typ­i­cally be­gin in Oc­to­ber and peak be­tween Novem­ber and Fe­bru­ary. Dur­ing this pe­riod, 70% of the cot­ton is brought to the mar­ket. Ac­cord­ing to ICF, the value of the cot­ton pro­duced this sea­son would be about .₹ 58,300 crore. lndian cot­ton prices pre­vail be­low in­ter­na­tional ones in the first half of the cot­ton sea­son.

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