Cotton trade system facing disintegation: SICA

First and foremost was entry of multinationals into the domestic cotton trade, which enabled them to buy large quantities from the market and store and sell to the mills on spot terms, he said in his address to the annual general meeting of the association on Monday. This was fully backed by the large amount of finances at low interest rates of three to five per cent which they have at their command, he said.

Many traders involved in local trading were facing the possibility of closing down shutters, he said, adding that the government has to regulate the role of multinationals. Their business activities should be transparent and supplemental to growth and development of local trade, which provided jobs to lakhs of people in small towns and villages, he said. Another major development was entry of Government agencies playing the role of procurement agencies at MSP and selling to mills, which are heavily subsidised by the government, he said.

This has taken away the beneficial features of cotton purchases like selection, price fixations according to demand and supply and regulating their purchases according to market demands and finances, Soundara Raj said. These activities of the States have driven away a large number of traders and brokers, he said and urged Governments to find out ways to sustain this knowledge store house and allow them to function.