SIMA demands CCI revamp for fair cotton trading policy

15 Oct '15

3 min read

The Southern India Mills' Association (SIMA) has appealed to Textiles Minister Santosh Gangwar to direct the Cotton Corporation of India (CCI) to adopt a transparent and fair cotton trading policy which would ensure win-win strategy both for the farming and cotton textile manufacturing communities.

In a press release, SIMA Chairman M Senthilkumar has proposed restructuring the Board of CCI by inducting major stakeholders particularly, the industry representatives, which consumes over 80 per cent of the cotton produced in the country. He has said that any short sighted policy would only aggravate the ailing textile industry resulting in serious financial stress.

Senthilkumar pointed out that during the season 2014-15, CCI procured the entire volume of good quality cotton grown in Telangana, Andhra Pradesh and parts of Maharashtra and did not release this cotton for more than two months making the actual users suffer seriously. He said that CCI has always been quoting much higher bench mark price than the actual market price thus resulting in speculation.

“During the cotton season 2008-09, CCI offered bulk discount benefiting few traders and making the industry pay Rs.2000 to Rs.4000 more for the home grown cotton,” he said. He also that during the season 2014-15 also, CCI adopted the same policy of offering bulk lots and forcing small and medium size mills pay Rs.500 to Rs.1000 to the traders for procuring the required cotton. “CCI should offer cotton in smaller lots so that all the size of textile mills could directly procure cotton from CCI and avoid middlemen,” he said.

Senthilkumar pointed out that the CCI plays a major role in seed sales and often sells the seeds at lower price, which affect the price of cotton and its procurement by the regular ginners. The SIMA Chairman appealed to the Textiles Minister to direct the CCI to commence cotton sales immediately and sell the cotton in a phased manner throughout the season and ensure stability in the cotton price and also see that domestic mills are able to purchase the CCI cotton at international price or slightly lower than the same to take advantage of the home grown cotton and mitigate the challenges currently being faced by the industry.

CCI should avoid quoting higher bench mark price which results in speculation and e-auction should be left to the market forces, he said.

Senthilkumar also said CCI should also sell the cotton seeds by e-auction and follow fair cotton seed trading policy.

The SIMA chief also appealed for the merger of the Cotton Consultative Committee and Cotton Advisory Board as it was functioning earlier as there is no transparency in the estimates. He has also suggested reviving the stakeholders Sub-Committee which has been estimating the ginning and pressing figures and also the closing stock of cotton in a transparent manner. (SH)

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