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Spinning mills have reason to cheer
09
Feb '09
Spinning mills have reason to cheer on hearing the decision of the Union cabinet to offload cotton stocks held by the Cotton Corporation of India (CCI), at subsidized rates. The CCI has been the biggest purchaser of cotton in the new cotton season, which saw Minimum Support Prices (MSP) of cotton being raised by 25-40 percent.

The decision of the cabinet was based on the huge inventory of cotton lying with CCI, purchased at a price, higher than those prevailing in international markets. The proposal to sell bulk buyers of cotton at discounted rates is practiced by the Maharashtra State Cooperative Cotton Growers Marketing Federation.

Trade bodies including the Confederation of Indian Textile Industry (CITI), have been demanding for a long time that CCI, start offloading its stocks in the Indian markets at internationally competitive rates, to avoid a situation of artificial shortages in the market. CCI is expected to sell cotton at subsidized rates, once it receives the notification from the government.

The cabinet has approved a budgetary grant of Rs 5,000 million to the CCI to compensate against the losses incurred by it, in selling the cotton at subsidized prices. CCI had purchased the cotton at MSP, while the international prices were ruling at a discount to the MSP at that time. CCI has so far purchased 6.7 million bales (1 bale=170 kg) of the white gold in the current cotton season.

Fibre2fashion News Desk - India

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