T. Rajkumar, chairman of the Confederation of Indian Textile Industry and Ravi Sam, chairman of the Southern India Mills Association, said more textile mills, garment units and weavers should use the MCX platform to buy cotton.
Mr. Rajkumar, who also heads the MCX Cotton Products Advisory Committee, and Mr. Ravi Sam told the press here on Monday that after a steep rise in cotton prices in the last cotton season (October 2021 to September 2022), textile units There is a need to streamline cotton trading on MCX platform of demand. Therefore, a Product Advisory Committee was constituted and based on its suggestions, a new cotton contract became operational on MCX from February 13.
According to the new system, a lot should contain 50 lakh to 100 lakh bales, there would be warehouses across the country, a maximum of 20,000 bales a person could trade, and a maximum of 6% price rise in a day. A meeting was organized here on Monday to create awareness among the textile mills, especially the MSME units, about how to trade cotton on MCX.
MCX officials said that cotton worth about Rs 150 crore is traded daily on its platform and most of the trading is done by traders and ginners. Since the launch of the new system, the business volume remained low and to increase it awareness should improve and more textile units need to participate.
Textile and apparel exporters often faced problems due to fluctuating prices as they had to make price commitments to their buyers three or four months in advance. The total trading volume on the MCX platform was around three lakh bales, while industry consumption was 300-320 lakh bales and the country’s cotton production was 340-360 lakh bales annually.
The objective of the revised contract was to increase the liquidity of cotton in the market. New York cotton futures and Chinese cotton futures accounted for more than 80% of physical transactions. He said that the volume of physical transactions should increase in India as well.