For the textile industry here, hike in cotton prices in two months is having an impact on the competitiveness of the entire textile value chain and hence, the industrial associations have sought measures by the Textile Ministry to stabilise cotton prices.
Southern India Mills’ Association (SIMA) chairman M. Senthil Kumar said the mills want the Indian cotton prices to be on a par with international prices throughout the year. The prices should be stable. When the prices increase suddenly, the entire value chain is affected for about four months in a year.
“Hence, when we met the Textile Minister Smriti Irani recently, we appealed him to introduce a system that will bring stability to prices. She has asked for a proposal and we will send it shortly,” he said.
The South India Spinners’ Association had appealed to the Minister that Cotton Corporation of India, which purchases cotton at minimum support price, should sell the cotton only to small and medium-scale textile mills.
According to Prabhu Damodaran, secretary of Indian Texpreneurs Federation, one of the main factors that will help textile mills take the right decision on raw material purchase is accurate data on cotton.
All the data available now is based on inputs from different sources.
Hence, handy meters should be attached to ginning machinery that will register the data on the cotton pressed. This can be compiled by the Textile Commissioner’s office and released to the industry at regular intervals.
Similarly, efforts should be taken to have satellite data on cotton production. The Cotton Corporation should purchase 30 per cent to 35 per cent of the cotton produced in the country and sell it to the mills regularly. This will bring down speculation in the market, he said.
The SIMA also sought extension of the special package (for Rs. 6,000 crore), which was announced for the garment sector, to the made-ups segment.
It said that since the disparity in cotton and yarn prices is bringing down the profitability of mills, the Government should give incentive such as interest subvention for yarn exports.
Since spinning capacity in the country has increased over the years, the hank yarn obligation for each mill should be reduced from 40 per cent to 20 per cent.
