Ramesh Susarla

Much-hyped textile policy fails to galvanise the industry

GUNTUR: The spinning and ginning mills in the State have gone into a tailspin with steep rise in raw material from within the country.

Currently only 20 per cent of spinning mills and 10 per cent of ginning mills are running, that too only to meet export commitments.

The situation in the cotton industry has come to such a pass that indigenous cotton had turned costlier for the millers compared to imported cotton and the recent imports by several millers from West Africa, China and Pakistan in large quantities point to this situation.

Country produces 2.8 crore bales per year and indegenously 2 crore bales are consumed, but the market has suddenly crashed and the 40 per cent of the yarn produced here is exported with India standing 3rd in the international export market, but the position might be short-lived.

After a much-hyped up textile policy of the State Government failing to provide any impetus to the cotton yarn industry, the minimum support price of cotton for farmers going up from Rs.2,060 last year to Rs.3,000 during current season and the Technical Upgradation Fund (TUF) drying up, all the spinning mills owners are at their wits end.

India, which had a capacity of 30 billion spindles till 2005, enhanced its production capacity to 45 billion spindles, leading to country’s exports turning non-competitive in the international market.

Yarn exports, that were 9,000 containers per month from various ports till December 2007, have come down to 10 per cent of that figure and local weavers are unable to afford the yarn being supplied by local spinners.

Weaving capacity had gone up only by 3 per cent in the current year, said Kancherla Anjaneyulu, owner of Supriya Mills in Guntur district. Cotton Corporation of India, which had bought about 1 lakh bales from the farmers, was also unable to auction its stocks to ginners.

In Guntur, out of the 450 ginning mills only 50 were currently functioning signalling the downtrend.

Majority of the spinning mills have only 10 days of stocks with them and if there was no subsidy given to spinners to the tune of Rs.6,000 per candy, the losses for all the mills would mount enormously, he pointed out.

At a time when the State produces 25 lakh bales, cotton is coming in from Pakistan and China and there is a yarn market in Brazil and Turkey, but production costs have turned prohibitive.

Giving an example, Mr. Anjaneyulu said lint costs Rs.60 a kg., yarn costs Rs.120 a kg. finished cloth Rs.120 a kg. and one Kilogram of readymade cotton shirts (six in number) cost Rs.12,000 in international market.