Business

Higher MSP proposal for cotton irks textile industry

COIMBATORE: The domestic textile industry has expressed concern over the Central Government’s proposed increase in minimum support price (MSP) for cotton for the 2008-09 season (October-September). In a release, the chairman of the Confederation of Indian Textile Industry, P. D. Patodia, has said that “the textile industry is in for an unprecedented crisis in the coming year, thanks to the minimum support prices finalised by the Government for the cotton season 2008-09.” Prices were likely to be increased from Rs. 1,800 in 2007-08 to Rs. 2,500 a quintal in 2008-09 for medium staple cotton and from Rs. 2,030 to Rs. 3,000 a quintal for long staple cotton. Normally,

MSPs were raised by 5-10 per cent. However, it was 38-47 per cent this year. Mr. Patodia explained that the standard variety of Shankar cotton was being quoted at Rs. 24,500 a candy (356 kg) for the new crop and the mills were finding it difficult to buy at this price. The proposed increase in MSP would translate to about Rs. 26,000 a candy for this variety. “This is bound to reduce consumption of Indian cotton by mills,” he said.

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