At the 1st Meeting of MCX reconstituted Product Advisory Committee meeting (PAC) held at Mumbai, T Rajkumar, Chairman, CITI, was unanimously elected as the Chairman of the Committee.
An urgent concern of the cotton textile industry has been the unprecedented volatility in raw cotton prices in domestic as well as international markets. In a bid to address the price volatility of cotton, stakeholders from the sector represented the matter to SEBI and MCX with a request to take measures to make the futures market more representative of the market trends and address the concerns arising out of the volatility.
As short-term corrective measures, the Security and Exchange Board of India (SEBI) suspended trading in all-cotton futures contracts on Multi Commodity Exchange (MCX) from January 2023 and subsequent contracts were temporarily not available for trading till the revised contract specifications are finalised, which was to be done in a month.
For long term solutions, in a joint meeting of SEBI with the MCX and cotton value-chain participants, it was decided that the cotton contract specifications shall be revisited and modified in consultation with the product advisory committee of the exchange and other stakeholders including members of the Textile Advisory Group. MCX had planned to expand the Cotton Product Advisory Committee to include more representation from value chain participants including the textile industry.
While seeking wholehearted cooperation and support from the committee members, Rajkumar as Chairman of PAC, said that most of the contract specifications have been modified to curb speculation and protect the interests of the entire cotton value chain including the farmers.
He further thanked Hon’ble Minister of Textiles, Piyush Goyal, Secretary Textiles, Upendra Prasad Singh and Textile Commissioner Smt. Roop Rashi for the continued support and holding multiple stakeholder consultations with an aim to address the various structural issues including the cotton price volatility issue and strengthening the future contracts.
He also elaborated on the proposed path to be taken to address the various issues of the cotton value chain that would ensure a win-win situation for all the stakeholders across the cotton textile value chain.
Rajkumar is hopeful that proactive initiatives of TAG will go a long way to make India – the true cotton clothier of the globe.