The Southern India Mills Association (SIMA) is estimating the cotton crop at 370 to 380-lakh bales of 170 kg each at a very comfortable position during the 2017-18 cotton season.

Meanwhile, the Ministry of Agriculture has also confirmed that the area under cotton in 2017-18 season has jumped to 119.88-lakh hectares from 101.72-lakh hectares in the earlier season. The crop has continued to draw significant rainfall in areas that were deficient, and this in turn could improve the crop position.

K Selvaraju, the Secretary General of SIMA said that even as the crop position is comfortable, a good number of mills are not working at their optimal capacity as they are facing heavy cash crunch resulting in a huge accumulation of yarn.

In fact, many of the spinning mills in the south have resorted to a “go slow” tactics. Declining demand for the yarn has driven quite a number of small weaving units out of business too. This is worrisome.

Since 2014-15, yarn production had stagnated at around 4,000-million kg level, despite the increase of over 3 million spindles in the last three years.

However, according to source, cotton arrivals peak by the end of September in north compared to the central and south cotton zone though cotton arrivals could be delayed due to rains.