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Government-owned Cotton Corporation of India will release in the domestic market the cotton stock it holds, Commerce and Industry Minister Anand Sharma has said. The Minister, however, did not specify the amount of cotton that will be released or a timeframe for the release.
“That will happen,” Sharma said on Wednesday answering questions from reporters on whether the Corporation would off-load its stocks in the open market.
The Corporation had built the stocks by buying cotton from the open market as part of the Government market intervention programme following a dropped in prices below the minimum support level.
For the current season to September, the Centre has fixed Rs 3,900 a quintal as the support price for long staple cotton and Rs 3,600 for medium staple cotton.
Prices fell despite a lower production this year at 325 lakh bales (170 kg each) against 354 lakh bales last year.
The fall was due to lack of demand from the textile sector and high carryover stocks.
The textile industry had been asking the Government to ask the Corporation to release the 22 lakh bales of cotton it had procured to cool the surging market.
In a representation earlier this month, textile body Confederation of Indian Textiles Industry said that cotton prices had increased about 15 per cent in the last few weeks and the Corporation should dispose of its stocks to curb the price rise.
Prices for Shankar-6 cotton that is in demand for export have increased to Rs 39,500 a candy of 356 kg currently from around Rs 34,000 at the end of January.
“It is essential that the Corporation and other procurement agencies release cotton in the market to ease price pressures,” CITI chairman S.V. Arumugam had said.
Cotton Corporation Chiarman B.K. Mishra had said earlier this week that it expects to receive the Centre’s approval by next week to release the stocks.
Rising prices is forcing the Indian textile industry to import. Industry body Texprocil’s Chairman Manikam Ramaswami has warned that importing cotton at higher international prices would exacerbate the current account deficit.
The Government, therefore, should ensure that Indian cotton is made available at international prices or lower.
Mills have contracted to import 1,17,647 bales (each 170 kg) in the last one month from African countries, according to Manikam Ramaswami, chairman of the Cotton Textiles Export Promotion Council.
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