Indian cotton prices have been on the rise, increasing sharply during the month of February. The price of Shankar-6, the benchmark variety, has increased 7% since the beginning of the month, according to the Coimbatore-based Southern India Mills Association (SIMA).
On Feb. 25, SIMA expressed concerns about the domestic price increases in a representation to Indian Union Minister of Textiles, Anand Sharma. Mr. S. Dinakaran, chairman of SIMA, has alleged that some of the major traders are hoarding their supplies of cotton. That hoarding, combined with price speculation, are the factors that have led to the sharp price increase in the domestic market, he says.
However, Dinakaran has expressed satisfaction with regard to the stability of global prices and the revival of the Indian textile industry.
SIMA has urged the Union Minister to instruct Cotton Corporation of India (CCI) to release its stocks of long staple varieties like MCU-5 to domestic mills. CCI has recently procured 2 million bales (170 Kg each) of long staple varieties from Andhra Pradesh and SIMA wants this stock to be released to domestic mills.
To ensure domestic mills have sufficient supplies, SIMA has also urged that the stocks it wants CCI to release not be made available to exporters and traders.