Please fill in your details to download the Table of Contents of this report for free. We also do customization of these reports so you can write to us at firstname.lastname@example.org in case you need any other additional information.
The textile industry wants CCI to procure about 70 to 80 lakh bales cotton during the peak season and keep it as buffer stock, to be sold to actual users during the months of May to September.
“The idea of creating a buffer stock for exclusive use by a certain sector is wrong as it will not only distort the market but will also unsettle other sectors of the cotton value chain,” said Dhiren N. Sheth, president of CAI, in an official statement.
“Apart from this, creation of a buffer stock system would require a total investment of about Rs 16,000 crore for procuring the desired 80 lakh bales of cotton which in turn will involve a total recurring expenditure of hundreds of crore a year by way of carrying cost including interest and warehousing cost. In addition to this, CCI will have to bear the loss that may arise due to fluctuation in prices,” he added.
A similar reserve policy was also implemented in China. A huge stockpile of cotton was created in the country which was eventually liquidated. The country's cotton economy continues to suffer due to this debacle.
Additionally, China is a huge cotton deficit country while India is a huge cotton surplus country and cotton is available to Indian mills at their doorstep. This is another good reason why India should not follow suit and create any buffer stock, says the statement.
“India should also learn a lesson from mistake that China made by creating a buffer stock, which created inefficiencies in their system for which China continues to pay a heavy price even now. If the problem sought to be addressed by creating a buffer stock scheme is non-availability of funds with the textile mills to buy and stock cotton, it would be appropriate to address this through banking channels, Reserve Bank of India and the finance ministry rather than creating this scheme,” continued Sheth.
The Indian government had earlier rejected a similar proposal for creating a strategic cotton reserve for exclusive sales to mills. (KD)
Fibre2Fashion News Desk – India
| On 3rd Dec 2020
China has overtaken the United States in the third quarter of this...
Vietnam's textile and garment industry is predicted to earn $33.5-$34 ...
Uzbekistan's Textile-Contact Company recently signed a $12-million...
Farmers who produce seeds earn 50 per cent more
‘In future, clothing boundary lines will become increasingly blurred.’
Fashion tech has to be lean and very productive
The Shradhdha Group of companies was established in 2010 and is based out...
Describing itself as the best body shape and garment fit company in the...
Brighi Technologies began in 1970 with trading and repairing sewing...
Ventile is a registered trademark used to brand a special high-quality...
Suominen Corporation is a manufacturer of nonwovens as roll goods for...
Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...
Golfwear and menswear brand Devereux is set for greener pastures. Robert...
Gramin Vikas Evam Chetna Sansthan
Ruma Devi is a jet-setting promoter of artisans who has empowered...
Silvia Venturini Fendi
"Yes, my confidence and positive attitude are my strengths and should be...
Letter to Editor
Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.
Subscribe today and get the latest information on Textiles, Fashion, Apparel.