Raw material shortage stares textile mills

Industry body wants CCI to release more bales of cotton. The raw material stocks at many of the 32 mills are barely enough for ten days.

Textile mills in Telangana are running out of cotton, creating a raw material crisis that will spell doom for thousands of their workers unless the Cotton Corporation of India (CCI) bails them out with more bales.

“The raw material stocks at many of the 32 mills are barely enough for ten days,” says Sushil Sancheti, treasurer of Telangana Spinning & Textile Mills Association (TSTMA).

Making them sound the alarm bells is not as much the inventory as the limited stocks put up for sale by CCI. “There is a huge mismatch between the requirement of mills all over India and the supply offered by CCI,” the association president R.K.Agarwal says.

Sale stopped

The Centre’s nodal agency to undertake price support operations whenever kapas (seed cotton) price hovers around the support level, the Corporation is holding 83 lakh bales of cotton. For four months from November it did not sell and when it began last month the sale nationwide was limited to 3,000-5,000 bales a day, Mr.Agarwal says.

The problem, however, is not peculiar to Telangana mills. A recent representation of the Confederation of Indian Textile Industry to Union Minister of State for Textiles says: “In States like Andhra Pradesh [with around 200 mills], Telangana and Maharashtra, CCI has bought large quantities through MSP operations. [As a result] there is a shortage of cotton in these States and the local mills are forced to get cotton from distant places, incurring additional transportation and other costs.”

Most inopportune time

TSTMA says CCI procured 50 lakh bales or nearly 90 per cent of the total arrivals of raw cotton in Telangana. While Telangana mills provide direct employment to 20,000 people, the number for AP mills is 50,000. Women and people from rural areas form a large chunk of the workforce.

The timing, Mr.Sancheti says, could not be worse as the mills’ realisation on the yarn is down by as much as 25 per cent. The agency should “offer at least 50,000 bales per day to the spinning and textile mills through e-auction as there is no other source of supply,” adds Mr.Agarwal.