MUMBAI: The entire textile-thread industry is getting affected as cotton prices hit a record high this year. They have been requested to allow duty-free import of cotton from these industries amid crop speculation and short supply. The National Committee on Textiles and Closure (NCTC) recently met Industries and Commerce Minister Piyush Goyal in this regard.
Trade sources ruled out the possibility of large-scale hoarding by traders and MNCs saying that as on March 31, 209, there is a stock of about 50 lakh bales (1 bale of 150 kg) left in the pipeline, which is usually 20.20 lakh bales. Till date, there are 50 lakh bales. Farmers currently have the same quantity of material. Thus the total quantity in the pipeline is about 20 lakh bales.
The cotton crop in the country this year is estimated to be 20 lakh bales as against 50 lakh bales last year. While the demand for cotton is expected to increase from 20 lakh bales last year to 20 lakh bales this year. Cotton prices at home and abroad have risen to an all-time high of Rs 30,200 per cane as demand is higher than lower yields. The country currently imposes an 11 per cent duty on cotton imports, which affects the competitiveness of India’s textile and apparel industry.
Since January, the price of Indian cotton has increased by Rs. 15 to 20 has been increased. As a result, industries have to import high quality cotton by paying 11 per cent import duty to meet export orders, while other rival countries get the benefit of duty-free imports.
As a result of rising cotton prices locally, export orders from EU, US and Japanese importers have been canceled and shipped to Bangladesh, Vietnam, China and Pakistan, the organization said.