SIMA seeks withdrawal of duty

By V. Jayanth

CHENNAI, NOV. 24. The South India Mills' Association (SIMA) has urged the Centre to immediately withdraw the 5 per cent import duty on cotton to curb rising prices.

According to Mr. Manikam Ramaswami, SIMA Chairman, ``The sudden flare up in cotton prices in India is at much higher levels than support cotton price in the past. It is more due to higher international prices, depreciating rupee and the import duty on cotton''.

He said cotton was under the OGL without any import duty. Last year, when international prices were on a record low, a 5.5 per cent duty was levied to ensure that farmers got more than the support price.

With international prices now at 25 per cent more than last year's and the dollar rate up by more than 10 per cent as compared to last year, the duty should be removed to soften the flare up of domestic cotton prices, Mr. Ramaswami argued.

Normally, at the beginning of the cotton season, when peak arrivals take place, prices started dropping and started rising after April-May, when the offtake was more than arrivals. But the SIMA chief noted that this year, cotton prices had soared by 10 to 15 per cent even at the beginning of the season.

Since cotton constituted nearly 70 per cent of yarn manufacturing cost, such a steep increase in its price would affect yarn prices and hurt the handloom industry, domestic markets and exports to the non-dollar countries such as Europe, Japan, the U.K. and the Far East.

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Section  : Business
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