Interviews
Cotton export under OGL - SIMA demands a level playing field
02 Aug '11
5 min read
He has added that the industry has been demanding for working capital assistance at 7% interest rate with 10% margin money and up to 9 months credit limit to enable the Indian mills to procure cotton during the peak cotton season (December-March) and compete with the multinational cotton traders. SIMA Chairman has stated that China Cotton Reserve Corporation has been fully protecting the interest of their spinning sector by maintaining adequate buffer stock and also do not permit any external agency to trade the Chinese cotton directly.
He has added that the Government Policy has to take care of Aam Admi and ensure the people below the poverty line to source their clothing at affordable cost. He has further said that unplanned export of cotton would lead to hoarding and speculation resulting in steep increase in the prices of cotton and cotton yarn, which cannot be passed on to the handloom, power loom and garmenting sectors resulting in chaos in the marketing conditions and industrial unrest as happened during the beginning of the current cotton season.
SIMA Chairman has stated that the surplus cotton projected by the Cotton Advisory Board could be allowed under OGL with effect from 1st January to avoid artificial scarcity during the beginning of the season. He has also stated that the Cotton Corporation of India and NAFED should give preference only to the actual consumers and not the traders to avoid speculation of cotton prices. He has also suggested CCI holding 10 lakh bales as buffer stock to feed the small and medium spinning mills through out the season as these mills do not have holding power to store more than two months stock.
He has further stated that only around 60% of the cotton produced in the country is above average quality and therefore, the Policy should be framed in such a way that the Indian spinning mills do not find scarcity for good quality cotton. He has stressed that working capital assistance to textile mills and adequate financial support to CCI are essential for the farmers to get international price for the cotton during the peak season.
He has feared that the cotton export under OGL would also encourage the few manmade fibre manufacturers to jack up the price thereby making even 100% polyester and polyester cotton textile products costlier for the people below the poverty line, who are the ultimate consumers.
He has appealed to the Government to provide facilities of hedging; and Indian Cotton Reserve Corporation to maintain price stability and also Indian Cotton Arbitration Rules to handle the disputes appropriately. SIMA Chairman has also stated that around 80% of the cotton produced in the country is consumed by the domestic industry, the financial health of which is essential to sustain the cotton area and ultimately the income for the Indian farmers. Therefore, he has appealed to the Hon'ble Prime Minister to take a cautious decision while permitting cotton export under OGL after fully protecting the interests of the mother industry.
He has added that the Government Policy has to take care of Aam Admi and ensure the people below the poverty line to source their clothing at affordable cost. He has further said that unplanned export of cotton would lead to hoarding and speculation resulting in steep increase in the prices of cotton and cotton yarn, which cannot be passed on to the handloom, power loom and garmenting sectors resulting in chaos in the marketing conditions and industrial unrest as happened during the beginning of the current cotton season.
SIMA Chairman has stated that the surplus cotton projected by the Cotton Advisory Board could be allowed under OGL with effect from 1st January to avoid artificial scarcity during the beginning of the season. He has also stated that the Cotton Corporation of India and NAFED should give preference only to the actual consumers and not the traders to avoid speculation of cotton prices. He has also suggested CCI holding 10 lakh bales as buffer stock to feed the small and medium spinning mills through out the season as these mills do not have holding power to store more than two months stock.
He has further stated that only around 60% of the cotton produced in the country is above average quality and therefore, the Policy should be framed in such a way that the Indian spinning mills do not find scarcity for good quality cotton. He has stressed that working capital assistance to textile mills and adequate financial support to CCI are essential for the farmers to get international price for the cotton during the peak season.
He has feared that the cotton export under OGL would also encourage the few manmade fibre manufacturers to jack up the price thereby making even 100% polyester and polyester cotton textile products costlier for the people below the poverty line, who are the ultimate consumers.
He has appealed to the Government to provide facilities of hedging; and Indian Cotton Reserve Corporation to maintain price stability and also Indian Cotton Arbitration Rules to handle the disputes appropriately. SIMA Chairman has also stated that around 80% of the cotton produced in the country is consumed by the domestic industry, the financial health of which is essential to sustain the cotton area and ultimately the income for the Indian farmers. Therefore, he has appealed to the Hon'ble Prime Minister to take a cautious decision while permitting cotton export under OGL after fully protecting the interests of the mother industry.
Southern India Mills' Association (SIMA)
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