'CCI policy set to derail Make in India campaign'

14 Apr '15

3 min read

Chairman of the Cotton Textiles Export Promotion Council (TEXPROCIL) RK Dalmia has warned that the Cotton Corporation of India’s (CCI) reluctance to release cotton into the market could derail the ‘Make in India’ campaign.

“At a time when the industry is working towards realising the Prime Minister’s goal of ‘Make in India’, we cannot succeed if our raw material prices are higher than the international prices and artificial price rise is created by restricting supplies of available cotton with CCI,” he said in a statement.

Dalmia also urged the government to instruct the CCI to start releasing at least 50,000 bales per day by e-auction directly to the actual users even as a media report said that the CCI was contemplating a global tender to invite buyers.

Dalmia said the cotton textiles industry was going through a crisis due to non-availability of adequate quantity of cotton on account of the CCI’s “Stop-Go” policy despite holding high level of stocks.

Dalmia pointed out that the CCI has procured 86 lakh bales of cotton under the minimum support price (MSP) during the current season to protect the interest of farmers. Out of this, CCI has offloaded only 3 lakh bales of cotton so far and is presently releasing between only 3,000 to 5,000 bales per day as against a stock of around 83 lakh bales. This has only resulted in steep rise in prices besides creating shortage of good quality cotton for the textiles sector which in turn is adversely affecting the exports of yarn, fabrics and made ups.

The TEXPROCIL chairman said that if the CCI releases at least 50,000 bales per day for a period of 100 days through e-auction directly to the actual users, it would stabilise prices both in the domestic and international markets besides ensuring availability of cotton to cotton textile exporters. The CCI would still be left with about 30 lakh bales of carry over stock after 100 days, he said.

Dalmia stressed that in a cotton surplus country like India, the domestic cotton prices should remain lower than the international prices at all times. The CCI should follow a clear and transparent purchase and sale policy and not make adhoc decisions. As per its charter, CCI’s role is not only to procure cotton from farmers but also to ensure price stabilisation.

The CCI had earlier come under fire from the Confederation of Indian Textile Industry (CITI) and the Southern India Mills Association (SIMA) for not releasing cotton into the market. (SH)

Fibre2fashion News Desk - India

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