SISPA Urges CCI to Prioritize Cotton Sales to MSME Mills
By 2024-06-27 11:14:28
SISPA requests that CCI give MSME mills priority in cotton sales.
COIMBATORE: The South India Spinners Association (SISPA) has called for immediate action from the Cotton Corporation of India (CCI) to prioritize the sale of cotton to Micro, Small, and Medium Enterprise (MSME) spinning mills starting July 1. SISPA has also requested the continuation of the current cotton sales policy from CCI for the next three months.
"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 yarn and textile exports, as well as increased pressure from imports," stated S. Jagadesh Chandran, Secretary of SISPA.
Chandran also warned that selling cotton to traders leads to speculative practices, resulting in inflated prices and market instability.
Despite these 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. "Our request to the CCI is to refrain from diverting cotton stocks of 24 lakh bales, which is just one month of mill consumption. In the last three days, 2.5 lakh bales were sold to mills. If this trend continues, all stock will be sold in a month. We request CCI to stop selling to traders and instead retain these stocks for exclusive sale to mills," he added.
Chandran noted that cotton prices suddenly increased from Rs 58,000 to Rs 63,000 per candy four months ago. "At that time, we requested the Ministry of Textiles and CCI not to sell cotton to traders. Based on our request, the Union Ministry of Textiles advised the CCI not to sell cotton to traders. As a result, CCI stopped selling cotton to traders, and the cotton price immediately dropped 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," he said.
