As the apparel industry strongly urges the Government to ban the futures trading of cotton, expect the Government to take action on the same in the coming days.
The industry is of the view that futures trading cotton is adding to market speculations and further driving up fibre prices.
Just a few months back, the Securities and Exchange Board of India (SEBI), stock and commodity markets regulator, had suspended futures and options trading for one year in seven farm commodities.However, trading in cotton wasn’t curbed.
The industry is also pushing for a long-term raw material strategy for the sector and wants an export duty on the fibre to keep local supplies steady.
Recently various organisations, like AEPC and TEA,offered suggestions to the Government over quantitative restriction on the export of raw cotton and cotton yarn and reduction in the export benefit on export of cotton and cotton yarn–besides declaring cotton as an essential commodity.
It is being suggested by the industry that the Cotton Corporation of India (CCI) can keep a strategic reserve of about 10 million bales. This will enable it to resort to meaningful intervention in the market whenever there is a spike in raw material prices.
If media reports are anything to go by, the Union Textiles Minister Piyush Goyal is expected to take a decision, after considering these and other possible options.
Source : https://in.apparelresources.com/