Textile industry delegates have urged the Textile Ministry to come out with cotton fibre security policy to curtail the volatility in the price of the white fibre in the coming season. Members alleged that the stagnated growth in the cotton textile industry and exports is caused due to volatility in cotton prices.
The 19-member delegation which is led by SIMA and BJP State General Secretary met Mrs. Smriti Irani and submitted a joint memorandum.
M Senthilkumar, Chairman, The Southern India Millsâ€™ Association (SIMA), said that it was collectively decided by the 26 textile associations to insist the government to direct Cotton Corporation of India to procure 70-80 lakh bales during the peak season (when prices rule lower than international cotton price), retail it as a buffer and sell the same only to actual users during May and September. More than 80% of arrivals happen between November and March despite of the cotton year is October to September.
Prices soar during off-season (May to September), as mills do not have the wherewithal to stock cotton and are therefore pushed to procure cotton at high rates for at least five months.
â€˜80% mills are MSMEsâ€™
The fibre security policy is essential as more than 80 per cent of the units are in the MSME category.
Highlighting the price movement, the SIMA Chief said that the price had sky-rocketed from â‚¹33,000 a candy (of 356 kg) to â‚¹50,000 during July 2016, thus increasing the clean cotton price up to â‚¹ 65/kg, while the yarn price was up only by â‚¹20-30 a kg.
Spinning mills had to, therefore, incur a loss of â‚¹20-25 per kg during the last three months. Many units were compelled to cut production by 20 to 35 per cent, rendering many job less.
Downstream sectors such as handlooms, powerloom and apparels also incurred huge loss as there was a fall in the export of cotton textiles.
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