The Indian Cotton Federation has urged the Cotton Corporation of India to immediately release cotton lint stock held with it at the ruling market price level.
In a letter to CCI Chairman and Managing Director, Dr P Alli Rani, the Federation said member spinning mills were not getting quality cotton to meet their demand to cope up with the production of yarn and finished goods.
The trade circles have predicted lower cotton crop volume, though the Cotton Advisory Board has predicted production to be 337 lakh bales for the 2018-19 season with a reasonable carry over stock, ICF president J Thulasidhara said in the letter.
Multiple factors were affecting cotton movement and its availability to sustain the continuity of mill consumption with no layoff for labour, usually in the April-September season when supply of raw cotton is stagnant due to low arrivals in the market.
This not only reduces availability of raw cotton for the mills, but also increases its prices in the domestic market, he said.
In the last few months, while international prices have fallen by over 25 per cent, lndian prices have corrected by just five per cent, making lndian spinners totally uncompetitive, it said.
Since CCI still holds about nine lakh bales and was offering the same at higher price levels than MCX and spot prices through e-auction, ICF should come to the rescue of mills’ operations by offering cotton
lint stock in support of cotton consuming mills, he said.
“We have reliable feedback that the cotton arrival for the new season may begin by end of October 2019. We would also like to bring to your kind notice the fact that China during the off season sell a fixed quantity of raw cotton bales at a market linked prices from their reserve, every day, to safeguard the spinning industry”, Thulasidharan said.
ICF also requested the chairman to formulate a clear policy on pricing and sale of cotton to ensure that industry does not have to worry about getting raw cotton bales procured at MSP levels by CCI at reasonable level off season whose advantage is taken by MCX speculators and cotton traders, it said.- PTI