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Indian govt moots cotton price stabilization fund

2013-7-2
The Government of India is planning to set up a cotton price stabilization fund by imposing cess on exporters, Minister of Textiles K Sambasiva Rao has said.
 
Speaking to reporters after meeting stakeholders of the textile industry in Hyderabad, the Minister said the price stabilization fund would ensure stability in cotton prices, and fluctuation in cotton prices would not affect cotton growers and ginners.
 
The Minister suggested that the price stabilization fund could be managed by the Cotton Corporation of India (CCI), and this new fund can be used when there are drastic fluctuations in cotton prices.
 
Cotton exporters would have to contribute towards the proposed new fund, and the amount so collected would be used to build up a suitable inventory, the Minister said.
 
The proposal to set up the stabilization fund would soon be forwarded to the Ministry of Commerce and the Cabinet Committee on Economic Affairs, and once the proposal is approved, it would be mandatory for exporters to contribute to the fund, the Minister added.
 
However, the Textiles Ministry is yet to finalize the amount of cess that would be collected from exporters.
 
This year, India’s cotton exports are likely to touch 10 million bales of 170 kg each, compared to last year’s exports of about 12 million bales.
 
Earlier, the Cotton Advisory Board estimated India’s cotton exports this year at 8.5 million bales, but the depreciation in the Indian currency vis-à-vis global currencies, including the US dollar, is working in favour of exporters.
 
However, the Minister made it clear that the Government would allow cotton exports only to the extent of availability of surplus cotton after having enough to meet the domestic demand.
 
According to the Minister, India produces textiles worth US$ 85 billion annually, while its textile exports stand at around US$ 35 billion per year.
Source:Fibre2fashion
 
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