Southern India Mills' Association (SIMA) today blamed Cotton Corporation of India for always quoting the price of the commodity much higher than the actual market rate and sought Union Textile Ministry's intervention into the matter.
Pointing out that Cotton Corporation of India (CCI)'s this practice results in speculation, SIMA asked the ministry to direct CCI to have a transparent and fair cotton trading policy.
Any short-sighted policy would only aggravate the ailing textile industry, resulting in serious financial stress, a delegation of SIMA members informed the Union Textiles Minister Santosh Kumar Gangwar.
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Alleging that during 2014-15, CCI procured entire volume of good quality cotton grown in Telangana, Andhra Pradesh and parts of Maharashtra and did not release them for more than two months, SIMA chairman M Senthil Kumar claimed due to this actual users had to suffer.
During 2008-09, CCI offered bulk discount to few traders and made the industry to pay Rs 2,000 to Rs 4,000 more for the home-grown cotton, he added.
He further alleged that in 2014-15 also, it adopted the same policy, making the small and medium size mills to pay Rs 500 to Rs 1,000 to the traders for procuring the required cotton.
The CCI had started offering smaller lots after intervention of the Minister, but suspension of cotton sales by it in March and April last made the regular users of Telangana, Andhra Pradesh and Maharashtra cotton to suffer seriously, Senthil Kumar said.
As the global cotton export has come down drastically due to the Chinese cotton policy and India being the largest producer of cotton, it started holding more stocks and CCI had to exercise MSP operations during 2014-15 and also 2015-16 as the market prices ruled lower than the MSP prices, he said.
He also said that CCI, which played a major role in sale of the seed, often sold them at lower prices, affecting the kappas price and its procurement by the regular ginners.
The Minister should consider these and take remedial measures, enabling the textile industry to source the raw material at international price always and remain competitive in the open market, the chairman said.
There was a need to restructure CCI Board by inducting stakeholders, particularly representatives of the industry, which consumed 80 per cent of the cotton produced in India, he added.
