COIMBATORE: The South India Spinners Association (SISPA) has sought the intervention of Union minister for textiles’ Giriraj Singh to prioritise the sale of cotton to micro, small, and medium enterprises (MSME) spinning mills from the Cotton Corporation of India (CCI), which is proposed to sell to traders starting from July 1.
The textile sector in India is at a critical juncture, grappling with significant financial strain.Numerous spinning mills have ceased operations due to liquidity crises, high operational costs, and market volatility. These challenges are compounded by a notable decline in export for yarn and textiles as well as increased pressure from imports, said SISPA secretary S Jagadesh Chandran in a letter to the Union minister.
Despite the challenges, there are promising signs of revival within the spinning sector. Recent increases in garment export orders have enabled many mills to resume operations, leading to a growing demand for cotton to meet production needs.
“Selling cotton to traders leads to speculative practices, resulting in inflated prices and market instability. This undermines the sustainability of the textile sector and threatens the viability of mills”, he said.
Four months ago, cotton prices suddenly increased from Rs.58,000 to Rs 63,000 per candy. At that time, SISPA requested the ministry of textiles and CCI not to sell cotton for traders. Based on the request ministry of textile advised to CCI not to sell cotton to traders. Therefore, CCI stopped selling cotton to traders. As a result, the cotton price immediately dropped down to Rs 57,000 per candy and remained stable for the last four months.
“The cotton prices in the open market were also stable because CCI’s prices acted as a benchmark. If CCI resumes selling to traders, the prices will rise again,” said Jagadesh Chandran.
He also appealed to the ministry of textiles to support the request to the Cotton Corporation of India (CCI) to prioritize the long-term interests of the textile industry by maintaining unsold cotton stocks from July 1 for three months for MSME spinning mills.
“This proactive measure will uphold stability, resilience and sustainability within India’s textile value chain, contributing significantly to the nation’s economic growth objectives under the Make in India initiative,” he added.