With cotton prices rising, the textile sector has asked for the elimination of a 10% import tariff on the commodity.
Southern India Mills’ Association (SIMA) chairman Ashwin Chandran stated in a press statement that the Cotton Corporation of India’s (CCI) hike of 3,800 per candy of cotton during the last 15 days, as well as the 10% import tariff on cotton, were hurting the whole textile value chain. He said that it had rendered textile exports ‘expensive’ on the worldwide market.
Although the CCI provided a three-month lock-in for bulk purchases, he claimed that owing to a cash constraint and volatility in cotton pricing, textile mills were unable to profit. He argued that the import tariff had fueled price speculation. Indian cotton prices had surpassed international levels for several kinds.
According to Pradeep Kumar Agarwal, CMD of CCI, international cotton prices and MCX prices have climbed by 7,500 and 6,000 rupees per candy, respectively, in the previous one and a half months. However, he pointed out that CCI had hiked prices by $2,200 to 2,500 per candy during the same time period, with the exception of 1-2 kinds. In the previous month, textile mills directly acquired 40% of the cotton sold by CCI.