Cotton import duty exemption ended, prices increased, Tamil Nadu's spinning mills in trouble
Tamil Nadu has about 46% of India's spinning mills, of which about 1,000 units operate from Coimbatore, Tiruppur, Madurai and Dindigul districts. There are about 400 medium sized spinning mills in Coimbatore and Tirupur alone.
At the beginning of the current crop season (November), cotton prices were between Rs 53,000 and Rs 54,000 per candy. To ease supply constraints, the central government had waived 11% import duty on cotton from August to December, allowing mills to meet their raw material requirements through imports. However, this discount ended on 31 December, leading to a steady increase in the price, reaching ₹56,000 per candy on 15 January.
Indian Spinning Mills Owners Association vice-president P Prabhu attributed the sudden price hike to non-extension of duty waiver. Pointing out that the Cotton Corporation of India was selling cotton at a premium of Rs 800 to Rs 1,200 per candy, he said good quality cotton was in short supply.
Although yarn prices had increased by Rs 8-10 per kg, he said spinning mills were incurring losses due to weak market demand.
“Indian cotton prices are higher than international prices, which are around Rs 52,000–53,000 per candy, making it difficult for domestic mills to compete globally.” Representatives of the textile industry have demanded from the Center to extend the exemption in cotton import duty for another three months, so that artificial increase in prices can be prevented. He has also sought the intervention of the state government to put pressure on the Center on this issue.
He also reiterated his long-standing demand that the Cotton Corporation of India should open a warehouse in Coimbatore, which could reduce transportation costs by Rs 3-4 per kg.
read more :- CCI keeps cotton prices stable, weekly sales continue through online auction
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