Cotton being the engine of growth for the Indian textiles and clothing industry owing to the advantage of home grown cotton for several decades at a competitive price, which enabled the industry to become the second-largest employment provider in the nation providing jobs to over 105 million people including 6.5 million farmers, rural masses and women folks across the country, he said.
However, the industry has been facing challenges very often during the last ten years due to high volatility in cotton prices that account 60 per cent of cotton production for the yarn, Sam said.
Consequent to removal of cotton from the Essential Commodities Act, multinational cotton traders started dominating the Indian cotton economy, procuring cotton on a large scale during peak season taking advantage of hedging facility and cheaper funds, export cotton at a lower price, create scarcity and speculate the prices during the off season, the SIMA chairman said.
Further, he said the CCI also offloads bulk volume with attractive discount including free period up to 120 days to liquidate the stock and facilitate price speculation by constantly increasing the prices, which greatly affects the MSME cotton textile units across the value chain and the exporters find it difficult to meet the export commitments.
SIMA sought the Prime Minister’s immediate intervention to stabilise cotton prices as they have surged to the peak level in the last 11 cotton seasons especially in the international market.