Interviews
Central Govt to take appropriate steps to protect textile industry, SIMA
07 Jul '08
5 min read
This clearly indicates that the multinationals have totally dominated the cotton market and the entire textile industry is at the mercy of these traders and no way it is beneficial to the farmers.
Dr. Srinivasan has further stated that the multinationals have substantially covered the new cotton crop under forward cover and are quoting abnormal prices.
He has questioned whether these multinationals could procure cotton so freely in other countries, particularly our competing countries like China.
He has further stated that no other country permits international cotton trader to freely purchase affecting the domestic sector.
Dr. Srinivasan has mentioned that inspite of the industry cautioning the Cotton Advisory Board to restrict cotton export within 65 lakh bales, it has not been implemented by the Government and at the recent meeting 85 lakh bales have been estimated for export which might cross even 100 lakh bales in reality.
While all the countries maintained the stock to use ratio over 40%, this year our Government has allowed it to dip to below 20% which has been the main reason for abnormal hike in cotton prices, SIMA Chief stated.
Dr. Srinivasan has requested the Government to take immediate steps to address the cotton issues and ensure adequate supply of domestic cotton to the textile industry at a competitive rate.
He has said that the main objective of one-day stoppage is to protest against the abnormal cotton prices and also to request the Central Government to take the following steps immediately:
- Export of cotton should be suspended immediately until December 31, 2008 by which time the new crop would arrive and the situation can be reviewed.
- Customs duty of 10% and additional customs duty of 4% applicable to import of cotton should be withdrawn immediately so that cotton can be sourced by the industry from wherever it is available at affordable prices and a level playing field is created.
- Withdraw 1% incentive offered for cotton on export.
- Channelise all future cotton exports through CCI and other State Federation and levy 5% duty on cotton exports.
- Ensure at least 40% stock to use ratio, since all the competing countries maintain the same around 42%, and earmark only the remaining cotton for export in a staggered manner by implementing monthly quota for exports.
- The margin money for working capital to be reduced to 10% as against 25% and the interest on the working capital loans to be charged at 7% like agricultural loans.
Dr. Srinivasan has further stated that the multinationals have substantially covered the new cotton crop under forward cover and are quoting abnormal prices.
He has questioned whether these multinationals could procure cotton so freely in other countries, particularly our competing countries like China.
He has further stated that no other country permits international cotton trader to freely purchase affecting the domestic sector.
Dr. Srinivasan has mentioned that inspite of the industry cautioning the Cotton Advisory Board to restrict cotton export within 65 lakh bales, it has not been implemented by the Government and at the recent meeting 85 lakh bales have been estimated for export which might cross even 100 lakh bales in reality.
While all the countries maintained the stock to use ratio over 40%, this year our Government has allowed it to dip to below 20% which has been the main reason for abnormal hike in cotton prices, SIMA Chief stated.
Dr. Srinivasan has requested the Government to take immediate steps to address the cotton issues and ensure adequate supply of domestic cotton to the textile industry at a competitive rate.
He has said that the main objective of one-day stoppage is to protest against the abnormal cotton prices and also to request the Central Government to take the following steps immediately:
- Export of cotton should be suspended immediately until December 31, 2008 by which time the new crop would arrive and the situation can be reviewed.
- Customs duty of 10% and additional customs duty of 4% applicable to import of cotton should be withdrawn immediately so that cotton can be sourced by the industry from wherever it is available at affordable prices and a level playing field is created.
- Withdraw 1% incentive offered for cotton on export.
- Channelise all future cotton exports through CCI and other State Federation and levy 5% duty on cotton exports.
- Ensure at least 40% stock to use ratio, since all the competing countries maintain the same around 42%, and earmark only the remaining cotton for export in a staggered manner by implementing monthly quota for exports.
- The margin money for working capital to be reduced to 10% as against 25% and the interest on the working capital loans to be charged at 7% like agricultural loans.
Southern India Mills' Association (Sima)
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