SIMA appeals cotton textile stakeholders to stand united to cope with high yarn prices
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The Southern India Mills' Association (SIMA) chairman, Ravi Sam has appealed to all stakeholders in the cotton textile value chain to stand united and adopt a win-win strategy to mitigate the crisis rather than demanding the government to take certain short-sighted policy decisions. He said banning or imposing quantitative restrictions on cotton and yarn exports would tarnish the country's image as a reliable supplier in the global market.
The chairman said the Indian spinners have contracted over 10 lakh bales after April 14 as against 5 to 6 lakh bales contracted till April 13 from the beginning of the season that might reach the mills only by the end of June. He said the cotton price might soften once imported cotton as well as summer cotton from states like Tamil Nadu arrive at the mills, and cotton consumption might also drop considerably due to unviability. He also said the industry can appeal to the Government to extend the period of import duty removal beyond September 30 to tide over the crisis, which would change the market sentiments and would not affect the cotton farmers, as the prices would remain much above the Minimum Support Price (MSP).
The appeal has come in the backdrop of advice by Union Finance Minister Nirmala Sitharaman, who on May 9, 2022, had urged the stakeholders to avoid seeking any demands that might benefit one segment, but could affect others in the value chain. The spot cotton prices of Gujarat Shankar-6 benchmark variety that prevailed at Rs 76,600 per candy of 355 kg during the beginning of March 2022, is now ruling at Rs 99,000. The cotton yarn price was earlier Rs 411 per kg and is now ruling at Rs 481 per kg.
