‘While cotton prices are going up, yarn prices are coming down’
Coimbatore: The South India Small Spinners’ Association has appealed to the Centre not to allow export of cotton based on production estimation since it pushes up prices in the local market.
A release from the association said that the 1,800 textile mills in the State had invested about Rs. 18,000 crore and produced nearly 40 lakh kg of yarn a day.
This was almost 50 per cent of the yarn production in the country.
During the last four or five months, these units were hit with several problems, thus bringing down production, piling up of yarn and reduction in yarn prices. While the cotton prices were going up, the yarn prices were coming down.
Bank interest rates
The frequent unannounced power cuts were affecting the machinery and bank interest rates had gone up by nearly five per cent. The weakening of the dollar had led to large supplies in the domestic market, thus bringing down yarn prices.
In such a situation, export of cotton resulted in non-availability in the domestic market and spiralling of prices.
The association pointed out that about 70 per cent of the investments were through bank loans and the units would not be able to bear the loss for a longer time.
The Government should stop cotton exports, bring down the import duty for cotton and immediately resume the Technology Upgradation Fund Scheme.
The interest subsidy available to the mills under the scheme would reduce the interest burden for the mills.
The association president, R. Kuppusamy, said that unless these measures were taken up at the earliest, not only would a number of mills get closed but also it would lead to large-scale unemployment and loss of jobs.