Textile industry wants corporation to sell cotton at international rates

The domestic textile industry has demanded that the state-owned Cotton Corporation of India (CCI) should sell cotton at international rates. The demand has come at a time when the minimum support price (MSP) announced by the government in September this year is higher than the current market price.

In this regard, industry leaders are meeting in New Delhi on Wednesday to discuss the issue and put forth the demand to the government. The government raised the MSP for the current cotton year (2008-09) of medium long staple cotton to Rs 2,500 a quintal from Rs 1,900 a quintal, up 31.6 per cent where as prices of long staple cotton was scaled up to Rs 3,000 a quintal from Rs 2,030, up 47.78 per cent.

R K Dalmia, chairman, Confederation of Indian Textile Industry (CITI), said, “We will request the government that CCI should sell cotton to the industry at international rates (which currently are ruling below the MSP as well as the current spot price of cotton).” The industry anticipates that due to the rise in MSP, cotton prices would be firm.

J N Singh, joint secretary, Ministry of Textiles, had recently told Business Standard that cotton prices would be higher than the declared MSP.

During the last cotton year (October-September), the cotton prices in the country touched historical high of Rs 28,000 a candy (1 candy = 356 kg) and international prices ruled at as high as 81 cents per pound.

However, currently the domestic cotton prices (Shankar-6) have dipped to around Rs 22,500 a candy and international cotton is trading at around 55 cents per pound (approximately Rs 21,000 a candy). As per the latest estimates of Cotton Advisory Board, the country is expected to produce 32.2 million bales (1 bale = 170 kg) in the cotton year 2008-09 against last year’s produce of 31.5 million bales.