There is some relief on the cotton price front!
With the early arrival of new cotton and price pressure, the domestic market cotton price has also reduced from the level of Rs.1,00,000/- to Rs.90,000/- per candy (355 kg)– a reduction of around 10 per cent.
The MCX cotton price per bale (of 170 kg) that prevailed around Rs.50,000/-, till the last week of August, has now come down to Rs. 36,480/-, which is a reduction of around 27 per cent.
However, compared to the cotton price prevalent across the globe, especially countries like Pakistan and China, the Indian cotton prices are still higher by 15 per cent to 20 per cent.
The cotton requirement by the Indian textile industry would surpass the production–The duty-free export of cotton might encourage 12 per cent to 15 per cent of good quality raw cotton export from the country during the season resulting in cotton shortage during the off season.
Textile industry is also hopeful that with 8 per cent increase in cotton area and numerous steps taken to prevent the infestation of pink boll worm, white fly and curly leaf cotton diseases, the cotton production for the coming season might be comfortable enough to help the industry bounce back in a short span of time.
Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA), said that the domestic price must match the prices prevailing in the competing countries and internationally to have a level playing field and enable the Indian cotton textile industry to revive from the unforeseen crisis.
He appreciated the proactive and bold steps taken by Union Minister of Textiles to control the speculation in the cotton trading by directing SEBI and MCX to bring necessary changes.
He further added that the anticipated cotton price, even during the peak cotton season, would be much higher than the minimum support price and, therefore, the duty removal will not affect the farmers.