Home / Knowledge / News / Textiles / High MSP will aggravate current textile crisis - CITI
High MSP will aggravate current textile crisis - CITI
25
Nov '08
Although 40 percent hike in Minimum Support Price (MSP) is of great help to the farmers, it has proved to be a burden to the textile companies.

With the prices falling in the international market drastically and domestic graph moving upward direction, import of cotton has increased substantially in the recent period.

In this context, Mr D K Nair, Secretary General of Confederation of Indian Textile Industry (CITI) told Fibre2fashion, “Cotton production in 2008-09 cotton year is estimated by CAB at 322 lakh bales. Consumption in India has started declining and I expect a decline of at least 10 percent (around 25 lakh bales) during the year, compared to last year. International cotton prices have declined by around 40 percent during the last 4 months.

“In India, the prices should have declined, but the unreasonable MSPs are not allowing the market forces to operate. The result is that our cotton textile products will be substantially out priced in the international markets, aggravating the current textile crisis. Farmers may also not get the benefits of increased MSPs, since Government may not be able to procure or pay on time, given the magnitude of the procurement operations and requirement of funds.”

Further discussing how to cope with the current situation, Mr Nair stated, “Logically, the unreasonable MSPs should be scaled down substantially, in view of the current market situation. But, this may not be very easy for Government to decide on. Therefore, our suggestions are that mills may be enabled to buy cotton during the peak arrival season, by providing them working capital for cotton purchase at 7 percent (PLR now) interest, against margin money of 10 percent (25% now) and for a period of 9 months 3-4 months now). We have also suggested that CCI should be mandated to dispose of the procured cotton promptly, in order to avoid an artificial scarcity in the market.”

The Secretary General went on saying, "Export statistics beyond July 2008 have not been published by DGCI&S so far. Since the international financial sector crisis started after this period, we can see the impact on exports only when export figures from September 2008 onwards become available. US import figures are currently available for them period up to September 2008 and they show a negative growth of about 1 percent in their imports of textile products from India during Jan-Sept.2008 compared to same period of 2007, which itself was a very bad year because of the rupee appreciation problem."

Fibre2fashion News Desk - India

Must ReadView All

Courtesy: Reliance Industries

Textiles | On 24th Apr 2017

Reliance’s FY17 revenue from petrochemicals up 12.2%

Increase in prices across polymers and polyester chain has...

Textiles | On 24th Apr 2017

India, Kazakhstan to increase cooperation in textiles

Indian and Kazakhstan are deliberating upon increasing cooperation in ...

Textiles | On 24th Apr 2017

GST reflects 'One nation, One aspiration' spirit: Modi

Prime Minister Narendra Modi has said that the Goods and Services Tax ...

Interviews View All

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Anshul Sood
Oceedee

‘Indian footwear market is nascent and largely a trend follower’

Mohammad Mamun Ar Rashid
UL VS Bangladesh Ltd

Productivity, creativity and innovation play a vital role in the growth of ...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search