A delegation of textile industry representatives from 26 leading associations met Union Textile Minister Smriti Irani in Delhi on 29th September in New Delhi and urged the Centre to come out with a cotton fibre security policy. According to a press release issued by the Southern India Mills’ Association (SIMA), cotton fibre security policy is necessary to curtail price volatility of white fibre during the coming season.
The delegation stated that growth of the cotton textile industry and exports had stagnated due to cotton price volatility, the release said.
According to the release, 26 textile associations decided to collectively urge the government to direct the Cotton Corporation of India (CCI) to procure around 8 million bales during the peak season, when prices are lower than international cotton prices. Such a move would ensure that the procured cotton is used as a buffer and sell it to actual users during May and September, the release said.
Though the cotton season is October to September, more than 80 per cent of the arrivals happen between November and March. Prices soar during off-season (May to September), as mills do not have the wherewithal to stock cotton and are therefore pushed to procure cotton at high rates for at least five months, release said.
The release said that a 19-member delegation led by Tamil Nadu BJP State General Secretary Vanathi Srinivasan and SIMA Chairman M Senthilkumar met the Union Textile Minister Smriti Irani in New Delhi and submitted a joint memorandum. The delegation said that the cotton fibre security policy is essential since more than 80 per cent of the units are in the MSME category. The SIMA Chairman said that the price had skyrocketed from Rs 33,000 a candy (of 356 kg) to Rs 50,000 during July 2016, thus increasing clean cotton price up to Rs 65 per kg, while the yarn price was up only by Rs 20-30 a kg. Due to this, spinning mills had to incur a loss of Rs 20-25 per kg during the last three months. Many units were compelled to cut production by 20 to 35 per cent, rendering many jobless. Downstream sectors such as handlooms, power looms and apparels also incurred huge losses since there was a fall in the export of cotton textiles.