The Southern India Mills Association (SIMA) has appealed to textiles minister Santhosh Kumar Gangwar to look into the e-auction policy of Cotton Corporation of India (CCI) and instruct it to offer at least 50,000 bales of cotton in each centre and ensure the least difference in the cost of cotton procured by SMEs and the larger players.
In a representation to Gangwar, SIMA chairman T Rajkumar has requested him to instruct CCI to keep adequate stocks till the beginning of the new season to maintain price stability and also enable the SMEs to get continuous supply of cotton as they do not have access for imported materials, association in a statement said.
Rajkumar has pointed out that during the cotton season 2008-09, a similar situation occurred and CCI fully sold out its MSP cotton to the traders who increased the price by over Rs.3,000 per candy even after getting substantial bulk discount and free credit period up to six months. He has requested the government to ensure that such a situation is not repeated again and protect the interests of small and medium spinning mills and thereby the livelihoods of several lakhs of employees working in the spinning mills.
Spinning mills in South India especially the mills in Tamil Nadu are currently facing a crisis due to continuous fall in yarn exports during the last 13 months, glut in the domestic market due to oversupply, announcement of attractive industrial polices by various states enabling them to have cost advantage to the tune of Rs 20 per kg of yarn when compared to mills in Tamil Nadu and also undue delay in disbursing the TUF subsidies, SIMA said.
All the textile mills, particularly spinning maintain only one week to four weeks cotton stock as against the normal practice of three to six months stock due to financial crisis. In this scenario, the e-auction cotton policy of CCI is affecting the small and medium spinning mills very seriously, the statement added.
