Confederation of Indian Textile Industry (CITI) has requested the government for immediate release of cotton procured by various government agencies through Minimum Support Price (MSP) Operations.
Shri S.V. Arumugam, Chairman, CITI stated that cotton prices had increased steeply because of an artificial shortage of cotton in the market which is created partly by hoarding of cotton by traders and partly by non release of procured cotton by the Cotton Corporation of India (CCI) and other procurement agencies.
Shri Arumugam pointed out that the current stock of nearly 25 lakh bales have been procured through MSP Operations a few weeks ago and cotton prices have increased 12-15 percent after that. Thus, releasing these quantities now can fetch an impressive profit for the procured agencies. Shri Arumugam further pointed out that procuring cotton at MSPs when the market prices were lower gave the requisite protection to cotton farmers.
However, holding on to the procured cotton would help only traders who are also hoarding cotton purchased from the farmers earliest at low prices. Shri Arumugam further pointed out that a substantial part of the crop has already arrived in the market and therefore, increase in cotton prices now will help farmers only marginally.
Shri Arumugam observed that the textiles industry was finding it difficult to pass on the increased cotton prices to the consumers. He has requested government that the procured quantities of cotton may be released immediately which will also force the traders to release cotton held by them.
