Industry & Economy
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Textiles
Yarn contract standardisation — Industry response holds the key, says ICA President
G. Gurumurthy
Coimbatore
,
Nov. 24
"WE don't see a reason why we cannot implement a cotton yarn contract standardisation. But much depends on how the industry responds to this task."
This is what Mr Fritz Alexander Grobien, President of the International Cotton Association (ICA), feels about the current exercise undertaken by the International Cotton Advisory Committee (ICAC) in formulating a yarn contract on the lines of the international cotton contract format.
According to Mr Grobien, right now the effort is on evaluating the feasibility of working out a yarn contract and a lot of details from the industry side are required for this, though there has been a positive response from the industry.
"Cotton export contract is an internationally well accepted practice and has acquired a strong base but in the case of yarn marketing, the trading of yarn is by and large in the `letter of intent' route and you have to come out with a lot of details before you come out with a format," said Mr Grobien
The ICA President is of the view that this issue could assume greater importance from India's point of view as a leading yarn producer and in terms of its importance in trading of this commodity.
Indian industry's response to the yarn contract too is quite positive, he said.
The ICAC had, some time ago, set about exploring the scope for framing a yarn contract on the lines of that for cotton mainly from the feedback from the textile industry as the latter had adopted a view that the failures of the cotton contracts internationally were partly reflective of the backlash of transaction failures arising out of non-fulfilment of contractual obligation in yarn trade.
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