Despite the production predicted good, exports also under control, cotton price creates history by touching a new high, crossing Rs 65,000 per candy. Textile associations urge PM to take action.
Coimbatore: Opening stock sufficient, this year production predicted good, exports also under control but still cotton price creates history by crossing Rs 65,000 per candy. Textile associations urge Prime Minister to take action.
Textile industry stands second in generating employment throughout the nation next to agriculture. There are 52.47 million spindles in spinning sector, 8.76 lakh rotars, 24 lakh power looms and 22.86 lakh handlooms are operational. Annually, 350 lakh bales of cotton are produced in the country of which, 300 lakh bales are used. 50 lakh bales are been exported.
Total textile exports account to, US$ 38 billion. Textile industry shares, 4.3% in the GDP. As many as 110 million people are employed both directly and indirectly in this sector. In the global garment exports, India’s share is, 5.2%.
Cotton is the main raw material for this sector. In India each year October to September is considered as cotton season. This year the season started from this month with the opening stock of 100 lakh bales of Cotton (one bale:170 kilos). This year it is predicted that the total cotton production would be 355 lakh to 360 lakh bales. Exports would also be under control. Inspire all these, the price of cotton is continuously increasing abnormally. Price of cotton one candy (356 kilos) has increased to more than Rs 65,000. This is a big shock to all textile industrialists. Associations have urged the textile industrialists to avoid panic buying and also have written to Prime Minister to intervene in this issue and do the needful at the earliest. One of the need of the hour measures suggested is the removal of 10% Import duty on cotton.
The Southern India Mills Association (SIMA) Chairman, Ravi Sam said, "First of all, the industrialists need not worry about the abnormal price hike of cotton. This is only temporary. This year we have started our season with opening stock of 100 lakh bales. Export also would be under control. There will be sufficient cotton available throughout this season. Abnormal price increase which is witnessed at present will return to normal during November end or first week of December. Hence industrialists should stop panic buying.”
SIMA reasons why not to worry were listed. The “globally many investors have started investing in cotton. America has banned purchase of cotton from China's Zing Zang province which produces 10% cotton of global cotton production. Europe is also gearing up to implement ban. Globally there is panic witnessed and this is also one of the reasons for abnormal prices hike of cotton.
The “Central government should immediately withdraw Import duty 10% levied on cotton. If this is not done it will turn to crisis after April 2022. Cotton Corporation of India (CCI) should buy 50 lakh bales of cotton and sell them to the spinning mills directly. Since cotton is agriculture product. NABARD (National Bank for Agriculture and Rural Development) should help industrialists by providing working capital fund at 7% interest or interest subvention during 2021 November till 2022 March.”
“On behalf of our association we have written to Prime Minister to take action at the earliest." SIMA Chairman said.
The association stated that both farmers and industrialists welfare should be protected. The South India Spinners Association (SISPA), Honorary Secretary, Jagadesh Chandran said "The Small and Medium Sector (SMEs) industrialists are the ones who are very badly affected due to the abnormal price increase of cotton. They don't have working capital to purchase cotton. Unable to overcome the crisis, some mills are heading towards closure. Big mills have options to purchase cotton in bulk quantity and stock them for many months. But SME sector mills don't have any option. Since the price has increased by 70%. Industrialists are shocked and in a big fear. Both farmers and industrialists contribute towards the growth of the nation. When farmers incur loss, central government immediately takes action by allocating funds to CCI to purchase cotton in bulk quantity. Likewise when the cotton price exceeds abnormally above the Minimum Support Price (MSP) the central government should ensure that sufficient funds are allocated to CCI to procure cotton bulk quantity such as 50 lakh bales and ensure it is sold to the spinning mills directly. SME sector should be given more priority.
The central government should also ensure big spinning mills and traders should buy cotton only to certain limit. This will help to stop panic buying. In India cotton situation is good and has been predicted to be the same throughout the year. But still abnormal price hike of cotton looks strange. Prime Minister should immediately intervene find out the reason and take the needy steps at the earliest.