With cotton prices increasing day by day, for the last few days, the Southern India Mills’ Association (SIMA) has appealed to the Union government not to levy import duty on cotton during the next cotton season, which starts in October.
Ravi Sam, chairman of SIMA, said in a press release here on Wednesday that following the removal of import duty on cotton in April and changes brought about in MCX cotton trading, with the efforts of Union Textile Minister Piyush Goyal, domestic prices have softened. MCX cotton prices have reduced over 25 % in the last one week. Domestic cotton arrivals have started early and the cotton prices have reduced from nearly ₹1,00,000 to ₹ 90,000 a candy.
However, Indian cotton prices are still higher by 15 % to 20 % compared to international prices, especially with countries such as Pakistan and China. The cotton requirement by the domestic textile industry is likely to be more than the production and duty-free export of cotton that may result in 12% to 15% of good quality raw cotton going out of the country, leading to cotton shortage during the off season.
Mr. Sam said the government should not levy import duty on cotton “to enable the industry to achieve its potential growth rate and sustain its financial viability apart from protecting the jobs of over 35 million people employed in the cotton textile value chain.”
Cotton prices even during the beginning of the cotton season (October 2022 to September 2023) when arrivals will be high are anticipated to be more than the minimum support price. Hence, duty free imports will not affect farmers. If needed, government can consider levying the duty only during the peak arrivals of the season (December – March) to avoid recurrence of crisis during the end of cotton season 2022-2023, he said.
