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SIMA expects 2014-15 cotton closing stocks at 6-7mn bales
08
Jun '15
According to the Southern India Mills’ Association (SIMA), India would have a comfortable closing cotton stock of between 6-7 million bales by the end of the 2014-15 season.

“This would ensure better stability in cotton prices during the current calendar year,” SIMA chairman T Rajkumar said in a statement.

He also added that the country is also expected to have a comfortable cotton supply position during the 2015-16 cotton season and that the cotton market is expected to be stable in the same period.

T Rajkumar further added that this would greatly help the Indian cotton textile industry to leverage export performance particularly in the garment and made-up segments.

He stated that textile mills which used to carry three to six months cotton stock earlier have reduced inventory to just one to two months, mainly due to cotton price volatility.

He was of the opinion that there is an undue delay in getting TUFS subsidy and also exports subsidies during the 2014-15 season, due to which mills could not procure more cotton.

The predominantly cotton based textile industry has been producing almost 75 per cent of the spun yarn from cotton has been subjected to crisis from volatility in prices.

“But during the current cotton season, cotton prices have been comparatively stable due to reduced imports by China and the oversupply position in the global market,” the chairman noted.

As the international cotton prices were ruling lower than Indian prices, CCI had to venture into MSP operations and procured around 8.7 million bales during the 2014-15 cotton season.

“However, CCI’s selling policy not only affected the domestic market to a certain extent, but also made the mills using certain varieties of cotton grown in Telangana and Andhra Pradesh to face shortage of quality cotton as CCI did not release the cotton on time,” he observed.

According to the SIMA chief, with the bleak export demand, the carry over is likely to be around 7 million bales which is the highest cotton stock ever carried by India after 2008-09.

T Rajkumar also noted that though CAB has estimated that 7 million bales of cotton would be exported during current season, so far only around 4.5 million bales have been exported.

The SIMA chairman fears a rumour that the government is again making attempts to have Government to Government (G2G) arrangement to export definite quantity of cotton to countries like China, Thailand, Bangladesh, Pakistan and Vietnam.

He has appealed to the Centre to avoid such a policy and ensure that there is no government interference and leave the cotton market to take care of the supply and demand position. (AR)

Fibre2fashion News Desk - India

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