The proposal suggests revisions to guarantee price stability and a smooth supply to downstream sectors.
The Confederation of Indian Textile Industry (CITI) has requested government intervention to address the challenges faced by the trading policies of the Cotton Corporation of India (CCI).
In a joint presentation with allied textile associations, a memorandum was submitted to Piyush Goyal, Minister of Textiles, to discuss concerns related to CCI’s Minimum Support Price (MSP) cotton procurement practices. The proposal suggests revisions to guarantee price stability and a smooth supply to downstream sectors.
It is emphasised by the textile industry that the current practices favour multinational cotton traders, resulting in speculation in cotton prices that adversely affect yarn prices and exports of cotton-based textile and clothing products.
Due to the financial strain on the Micro, Small, and Medium Enterprise (MSME) spinning segment, the memorandum calls on Goyal to implement various measures, including the initiation of CCI cotton sales to registered textile/spinning mills from February/March.
The proposal advocates for retaining MSP-procured cotton as a buffer stock, releasing it based on international price differentials to ensure price stability. Monthly price announcements, factoring in MSP procured price, carrying charges, and other incidental charges, are also suggested.
Additional recommendations include extending a uniform free period of 60 days for all actual users, collecting a one-time Earnest Money Deposit (EMD) of 10 per cent for advance booking, providing a key loan facility by storing pre-booked cotton at individual mill premises for day-to-day use against payment, selling cotton in multiples of 130 to 150 bales (one truckload) on par with MCX to benefit small spinning mills, and establishing a sub-committee to monitor CCI’s trade practices and prices, taking corrective measures when necessary.
To highlight the mutual benefits for CCI, the Government, and the user industry, the joint memorandum underscores the adoption of these policies to ensure stability in cotton prices, safeguard the interests of MSMEs, and foster the long-term growth of the Indian cotton textiles and clothing industry.