Goyal cautions cotton traders to refrain from hoarding, price manipulation

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Union Minister Piyush Goyal cautioned cotton bale traders to refrain from manipulation of prices or resort to hoarding to make unfair profits

Piyush Goyal

Union Minister on Thursday cautioned cotton bale traders to refrain from manipulation of prices or resort to hoarding to make unfair profits.

Addressing textile industry players in a meeting, he also told them to “resolve cotton pricing issue in the spirit of collaboration rather than competition”.

The Minister of Textiles, Commerce & Industry, Consumer Affairs and Food & Public Distribution asked the textile industry leaders not to push the government to intervene.

“Goyal cautioned the cotton bale traders from manipulation of prices or do hoarding to make unfair profits,” according to an official statement.

The minister further stated that manufacturing sectors should not depend on government support for growth.

“Too much dependence of state support is not healthy for the robust growth of the sector,” the statement said.

The minister was intervening to resolve issues regarding cotton yarn prices between cotton yarn manufacturers and downstream textile industry.

He observed that farmers’ interests are being taken care of for the first time as they are now getting better cotton prices supported by good base MSP.

Pricing issue of cotton bales and yarn for the industry should not be allowed in any way to impact the better prices that farmers are getting, he added.

India’s cotton production is estimated at 362.18 lakh bales. The cotton season 2021-22 commenced from October with an estimated carryover stock of 73.20 lakh bales. Opening stock in the country is adequate to meet about two and a half month’s mills consumption.

“Cotton prices are ruling above the MSP level by about 40 per cent i.e. Rs 8,500 per quintal as against a minimum support price (MSP) of Rs 6,025 per quintal.

“Farmers are getting reasonably good prices for their produce which is in tandem with other agri-commodities as well,” the statement said.

Goyal said the idea of short-term supernormal profits by a section of players in textile value chain is not sustainable.

“No one should force the government to intervene. Let free and fair market forces play out. Supernormal profits should not be booked for short-term goals,” he said.

The minister asserted that the entire value chain gets adversely impacted even if one section gets weak.

He said cotton bale and yarn prices need to be such that all get benefitted.

Goyal emphasised that all stakeholders in textile value chain need to support each other for long-term sustainable growth.

The world cotton acreage is expected to increase 4 per cent to 33.27 million hectare as against 31.97 million hectare of last year. The production is projected to increase 6 per cent to 1,512 lakh bales (25.72 MMT) as against 1,426 lakh bales (24.26 MMT) of last year, and the consumption is expected to increase 2 per cent to 1,530 lakh bales (26.01 MMT) as against 1,505 lakh bales (25.60 MMT) of last year.

The Cotton Corporation of India is appointed as a central nodal agency under the Ministry of Textiles for undertaking MSP operations for cotton.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Thu, November 18 2021. 19:48 IST