16 December , 2022 Fdiindia
Cotton Industry Operating below Capacity Seeks Ease of Import Duties
The cotton industry continues to operate below its capacity seeking the removal of import duties. While at the same time, influential farmers, as well as trade aggregators, have indulged in the bureaucratic hoarding of cotton, expecting the prices to showcase an upward trajectory in the long run. The industry, at the current instance, has brought forth diverse opinions, one of them being that the ability to import freely might cause a hindrance in the farmer's sentiment working under a prevalent cotton crunch.
"Cotton arrivals are short by about 30-40% than normal. We are unable to meet our requirements through imports due to the import duty on cotton. Currently, Indian cotton prices are higher than the global prices by about 10-12%, while the foreign buyers of Indian cotton textiles, garments and yarn are quoting lower prices. We have requested the central government to consider removing import duty on cotton," said Ravi Sam, chairman of the Southern India Mills Association (SIMA).
According to the insider details, export details have declined over the period of time as produced cotton has been stocked by retailers to cover for the shortages of the COVID period. In addition, a fear of unmitigated recession has also impacted the prevalent interest of the textile and yarn producers. However, exporters say that they have buyers at competitively lower prices.
In the recent times, the prices of unprocessed raw cotton, also known as kapas, have fallen by 15% to 20% in the ongoing cotton season from Rs 9500-10,000 per quintal to RS 8000-8500 per quintal. With the already existing diverse opinions regarding the ongoing business, it's possible that the onset of recessionary trends in the global market further impacts the market prices.