Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA) has urged Prime Minister Modi to stabilize cotton prices that have surged to peak levels in the last 11 cotton seasons, especially in the international market. Sam said, the New York Futures Index that used to hover around 70 to 80 cents per pound is now ruling around 110 cents thus creating a panic situation and uncertainties in the business of cotton textiles & clothing products. NYF increased 25 per cent in the last 15 days. Indian cotton prices, though currently attractive due to comfortable closing stock position, have ncreased from Rs 41,900 per candy during December 2020 to Rs 57,000 per candy during the first week of October 2021 (Sankar-6 variety), he added.

India’s 2021-22 cotton season, which started with an opening stock of over 100 lakh bales, is likely to produce around 355 lakh bales, consume around 330 lakh bales, import around 10 lakh bales and thereby leave around 135 lakh bales for export and the carry over stock, Sam explains. India’s exports may exceed 100 lakh bales in the current season due to US sanction on Xinjiang Chinese cotton that accounts 10 per cent of the world cotton production resulting in not only shortage of cotton but also abnormal speculation in the cotton market.

Sam appealed to the Prime Minister to introduce an innovative Cotton Procurement and Trading Scheme for CCI by providing government funding to procure around 15 per cent of the cotton that arrives in the market during the season. This will enable the corporation to create a strategic stock for price stability, sell the cotton only to the actual users in a staggered manner till the end of the season and maintain some buffer stock for the next season, he added.