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Indian Cotton Federation to devise a standard contract
28 Sep '11
2 min read
Indian Cotton Federation (ICF), earlier called the South Indian Cotton Association (SICA), is now devising a standard contract for cotton as majority of the issues related with cotton trade are common.
The newly appointed President of the Association J Thulasidharan and Vice President KN Vishwanathan informed that the contract, which is to include norms related to local as well as international trade in Indian cotton, would be finalized only after consultations with all leading stakeholders and regional associations.
The duo said that negotiations are being carried out in majority of default matters, and all adjudication would be governed by the Indian Council of Arbitration and other laws applicable.
Terming the current year as a year of defaults, the office-bearers said major fluctuations in cotton prices at the start of the year resulted in an exceptional rise in the number of defaults by both sellers and buyers.
The price of cotton surged to historic Rs. 63,000 per candy (1 candy = 356 kg) during February to April 2011 and then, following the international price movement, it plummeted to Rs. 30,000 per candy within just a few weeks time.
As the prices plunged all of a sudden, several buyers refused to accept delivery of cotton at the contracted price, SICA Secretary A Ramani said.
The default volume in private trade alone was tagged at about 500,000 to 600,000 bales, C Soundarajan, the retiring President of SICA said and added that the situation has spurred a necessity for formulation of a common contract for Indian cotton.
The newly appointed President of the Association J Thulasidharan and Vice President KN Vishwanathan informed that the contract, which is to include norms related to local as well as international trade in Indian cotton, would be finalized only after consultations with all leading stakeholders and regional associations.
The duo said that negotiations are being carried out in majority of default matters, and all adjudication would be governed by the Indian Council of Arbitration and other laws applicable.
Terming the current year as a year of defaults, the office-bearers said major fluctuations in cotton prices at the start of the year resulted in an exceptional rise in the number of defaults by both sellers and buyers.
The price of cotton surged to historic Rs. 63,000 per candy (1 candy = 356 kg) during February to April 2011 and then, following the international price movement, it plummeted to Rs. 30,000 per candy within just a few weeks time.
As the prices plunged all of a sudden, several buyers refused to accept delivery of cotton at the contracted price, SICA Secretary A Ramani said.
The default volume in private trade alone was tagged at about 500,000 to 600,000 bales, C Soundarajan, the retiring President of SICA said and added that the situation has spurred a necessity for formulation of a common contract for Indian cotton.
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