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Textile industry representatives have asked the Government to direct Cotton Corporation of India (CCI) to release its cotton stock in the market to avoid an "artificial’’ shortage and bring prices down.
In a letter to Textiles Minister Santosh Gangwar, the Confederation of Indian Textiles Industry (CITI) complained that with the CCI holding a large stock of procured cotton, private traders were using it as an opportunity to hoard cotton held by them to push up prices further.
The CCI is holding over 83 lakh bales (170 kg each) of cotton which it has procured in the on-going marketing year (August 2014-July 2015), CITI said in a release.
The cotton has been obtained from farmers at support prices to prevent domestic prices from crashing in view of higher estimated outputs, but recently with domestic prices rising, CCI’s procurement has slowed down.
Price of cotton has increased by Rs 2,000 per candy (356 kg) over the last three months and Rs 1,000 per candy over the last one month, as per industry estimates.
“The only way to force traders to bring out cotton to the market is by disposing of CCI’s cotton stock through e-auctions and at reasonable prices,” CITI chairman Prem Malik suggested in the letter.
CITI pointed out that sine most of the cotton of the current season has already arrived in the market, increase in cotton prices at this stage would only help cotton traders and not farmers.
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