India Textile Enterprises Oppose Raising Cotton Support Price
India textile industry said that raising the minimum supporting price of cotton (MSP) proposal may lead to further deterioration of the domestic textile industry downturn.
Mr P.D. Patodia, President of the India Textile Industry Association (CITI), said that raising the MSP of cotton in the year of 2008-09 will not only push the textile industry further backward, but also be harmful to the continuous production of cotton farmers.
Mr Patodia explained that the rupee appreciation in 2007, the increase in raw material prices, the increase in interest rates and production costs this year have weakened the cost competitiveness of India's textile production chain. Now it is announced that a substantial increase in cotton MSP will aggravate the deterioration of the situation.
Most textile companies suffered losses in the last fiscal year and the first quarter of this fiscal year, and profits from many other companies were much lower than in previous years.
The lowest support price has reduced the textile industry's short-term recovery prospects.
At present, the price of new cotton is 24500 rupees / candy, which is difficult for textile mills to accept, because the textile industry is in a downturn.
The lowest supporting price of 3000 rupees means that the price of cotton per candy reaches 26000 rupees, and the textile mill can only import cheaper cotton, or use artificial fibers, or close production.
Industry and agriculture will be in turmoil unless the government can take immediate remedial measures to reduce MSP or to help the textile industry absorb additional costs and maintain cotton consumption.
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