COIMBATORE: The Southern India Mills Association (SIMA) has sought further measures from the Central Government to control cotton prices.
Deputy Chairman of the association J. Thulasidharan has said in a release that the recent removal of 10 per cent import duty and one per cent export incentive had given only a marginal relief to the Indian spinners.
Machinery utilisation capacity had dropped by 30 per cent in several mills, thus pushing up the cost of production.
While the prices of yarn had gone up by 17 per cent during the current cotton season, the cotton prices were up by almost 39 per cent. The Indian cotton prices were speculated between Rs. 19,000 and Rs. 30,000 a candy, which was abnormal.
Mr. Thulasidharan said the Government should suspend cotton exports till December 31, 2008 and all future cotton exports should be through the Cotton Corporation of India or other State federations.
The Centre should levy five per cent duty on cotton exports. It should ensure 40 per cent stock-to-use ratio and the margin money for working capital should be reduced to 10 per cent from the current 25 per cent. The interest on working capital loans should be seven per cent, on par with agricultural loans, he said.