SIMA advises mills to rely on ministry estimates
SIMA has also insisted mills to avoid panic buying of cotton, while pointing to International Cotton Advisory Committee’s information that higher cotton prices are driven by speculation and not based on fundamentals.
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COIMBATORE: The Southern India Mills Association (SIMA) has advised cotton textile mills to rely only on the estimates by the Ministry of Textiles and ignore information from other unreliable associations.
“Textile mills should rely only on the estimates published by Office of the Textile Commissioner, Ministry of Textiles on the recommendations made by the Committee on Cotton Production and Consumption (COCPC), which makes more realistic estimates,” said SK Sundararaman, chairman of SIMA.
SIMA has also insisted mills to avoid panic buying of cotton, while pointing to International Cotton Advisory Committee’s information that higher cotton prices are driven by speculation and not based on fundamentals.
“A similar advisory was issued, when cotton prices increased suddenly from Rs 55,300 to Rs 61,500 per candy of 355 kg during the second fortnight of February even though the cotton supply remained comfortable,” he said.
The COCPC has currently projected the opening stock as 61 lakh bales, crop as 323 lakh bales, imports as 12 lakh bales, mill consumption as 301 lakh bales, non-mill consumption as 16 lakh bales, export as 27 lakh bales and predicted a comfortable closing stock of 52 lakh bales.
“As these estimates are more scientific, the mills should be more cautious while procuring cotton for inventory purposes. The speculators intermittently hike the prices, artificially creating high volatility, severely impacting the performance of the textile industry,” Sundararaman said.
SIMA also appreciated Cotton Corporation of India Limited (CCI) for enforcing fair average quality norms and also Kasturi Cotton Bharat, the newly launched Indian cotton brand.