After prohibiting wheat exports to control spike in wheat prices, the Government on Thursday tried to address fears regarding rising prices of cotton.
Minister of Commerce and Industry Piyush Goyal met with stakeholders in the cotton sector and appealed to them "to divert only surplus cotton and yarn for exports". The cotton price rise is part of the "commodity shock" that the Ukraine war has generated across the world.
The textile community should supply cotton first to the domestic industry, Mr. Goyal said. Meeting stakeholders in the cotton value chain, he urged the community to support cotton farmers, spinners and workers. The Minister also launched Cotton Council of India under the chairmanship of Suresh Bhai Kotak.
"Council to have representation from Ministry of Textiles, Agriculture, Commerce, Finance, Commerce and Industry, Cotton Corporation of India and Cotton Research Institute," said an official statement. The meeting discussed views and suggestions to "soften cotton prices" on an "urgent basis".
Mr. Goyal said the Government would "actively consider the demand of the spinning sector for exemption from import duty on those import contracts in which bills of lading is issued up to 30th of September 2022 to overcome current cotton shortage and logistic issues".
Mr. Goyal's statement came in the backdrop of growing concern about increase in prices of cotton yarn. The situation escalated in Tamil Nadu where workers boycotted work in the garment units of Tirupur on Monday and Tuesday protesting against rising cotton prices. The protest has hit the garment units of Tirupur, Karur and Erode. Cotton price earlier this week touched ₹1 lakh per candy (356 kg). This was a dramatic jump from ₹57,000 per candy of last year.
The World Bank had forecast that the Ukraine war would generate the "largest commodity shock" since the 1970s. The war has altered the pattern of global trade which is pushing up prices of energy, cotton and food. The Commodity Markets Outlook Report of the World Bank has predicted that cotton prices will be 40% higher this year. A similar shockwave of prices across sectors was seen in the 1970s in the aftermath of the Arab oil shock of 1973.
