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