The Cotton Association of India (CAI) has opposed the creation of a cotton buffer stock and urged the central government to snub textile industry’s request of directing Cotton Corporation of India (CCI) to retain the buffer stock. This move will take the country back to the pre-liberalised era of late 1980s and early 1990s, according to the CAI.
The textile industry wants CCI to procure about 70 to 80 lakh bales cotton during the peak season and keep it as buffer stock, to be sold to actual users during the months of May to September.
“The idea of creating a buffer stock for exclusive use by a certain sector is wrong as it will not only distort the market but will also unsettle other sectors of the cotton value chain,” Dhiren N. Sheth, president of CAI said.
“Apart from this, creation of a buffer stock system would require a total investment of about Rs 16,000 crore for procuring the desired 80 lakh bales of cotton which in turn will involve a total recurring expenditure of hundreds of crore a year by way of carrying cost including interest and warehousing cost,” he added.
Apparel & Textile News – Apparel Talk, Indian Apparel
