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The Southern India Mills Association (SIMA) has urged the Textiles Ministry to ask the Cotton Corporation of India to announce a selling price for the cotton the latter procured from Andhra Pradesh.
The association, the apex body for spinning mills in the country, said that the corporation should in particular announce the price for the long staple variety MCU-5 to help the spinners.
The Cotton Corporation has procured over 20 lakh bales of the natural fibre, including MCU-5, as part of the Government’s market intervention operations.
Only a limited quantity of long staple cotton is available in the country and the Government should ensure that such varieties are available for domestic mills.
The availability will help the woven garment and made-up sectors to meet their export commitments. Expressing concern over the surge in prices, the association sought the intervention of the Government to arrest the price hike. Associaton Chairman S. Dinakaran said that domestic prices were rising at a time when global prices ruled stable.
Referring to the Cotlook A Index price behaviour, he said that the price per pound has been varying between 85 and 89 cents during the last one month whereas Sankar-6 cotton price which ruled around Rs 34,000 a candy (of 356 kg) in the beginning of the month is now ruling at Rs 36,500.
Hoarding
Alleging traders of hoarding cotton, Dinakaran said: “The Cotton Corporation has been delaying the announcement of the prices for varieties, such as MCU-5 and holding back its trade in the domestic market. The spiralling raw material cost has already made some textile mills look at imports. This will affect the farmer.
Further, the abrupt increase in cotton prices has sent wrong signals in the international market and the pace of demand for Indian cotton yarn and fabrics have started to slow of late.”
Industry sources charged that hoarding of cotton by some traders has led to the present situation.
Spinning mills in Tamil Nadu are already suffering due to acute power shortage.
Though there was some improvement in performance in the recent months due to stability in cotton price, there could be a reversal in the trend after around 55 lakhs bales of cotton have already been registered for exports.
Of this, 33 lakh bales have already been shipped out.
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