Union minister Piyush Goyal on Wednesday announced the formation of the Cotton Council of India amid calls for the removal of cotton from trading at commodity exchanges. The announcement was made after stakeholders from the cotton value chain met Piyush Goyal and reiterated their demand for a short-term ban on cotton and yarn exports.
The cotton industry stakeholders also demanded the classification of cotton as an essential commodity to control prices. Meanwhile, the Cotton Corporation of India suggested keeping a minimum stock of 1 crore bales.
Taking note of the unprecedented price rise of cotton witnessed in the current season, Piyush Goyal formed a council under the chairmanship of industry veteran Suresh Amritlal Kotak to look into the issue.
The first meeting of the proposed council has been scheduled for May 28.
"The council will discuss, deliberate and prepare a robust action plan for bringing out a tangible improvement in this field," a government
press release said.
Cotton price doubled, 'resolve issue in spirit of collaboration'
The price of cotton has more than doubled since October 2021.
The price of cotton has more than doubled since October 2021.
The minister and the stakeholders termed cotton productivity "the biggest challenge in the country". Goyal even asked stakeholders to resolve the cotton and yarn price issue "in the spirit of collaboration rather than competition and super profiteering, without pushing the government to intervene as it may have a long-term impact on the cotton value chain".
Piyush Goyal said, "The government is committed to protect the interests of cotton farmers, spinners and weavers."
Divert only surplus cotton and yarn for exports: Goyal
Addressing the stakeholders at the meeting, Goyal said the exports of cotton should not be at the cost of the domestic industry, and appealed to traders to divert only excess cotton and yarn for exports.
"Piyush Goyal appealed to the spinning and trading community to ensure hassle-free supply of cotton and yarn first to the domestic industry...He appeals to divert only surplus cotton and yard for exports," the press release said.
"The council will prepare a robust action plan to tangibly improve the cotton sector... Need to hold hands of cotton farmers, extending support for backward and forward integration," Goyal stated.
Textile mils struggle
Hit by the drastic surge in prices of cotton, spinning mills have become partially operational, while a few fabric manufacturers have decided to hit pause on production at least for a few days.
This move was aimed at encouraging purchases from markets outside of India to address domestic shortages. However, it may have resulted in a surge in international prices.
Meanwhile, the crisis has triggered fear that India may ban cotton export to stable the price rise in the country itself. It is likely that cotton exports may be banned till September if prices don't cool down. At the meet, the ban on exports was discussed as the last option on the table.
