Surge in cotton price forces textile mills to import

Coimbatore, June 21 (KNN) The textile mills in the southern region of the country have started importing cotton owing to high prices of cotton in the domestic market in comparison to the international market.

The textile mill associations have alleged that the price rise if because some traders are holding the commodity due to which the prices have surged to as high as Rs. 5000-7000 per candy. One candy is equivalent to 355 kgs.

Talking to KNN, General Secretary of the Southern India Mills' Association (SIMA), K Selvaraju said that the domestic traders are holding cotton and not selling it. This has led to increase in its price to Rs. 5000-7000 per candy.

“Though enough cotton is available in the country but some traders are holding the cotton, therefore we don’t have any option but to import it,” he said.

He explained that the yarn prices have not gone as high as to increase the cotton prices exorbitantly.

“The Yarn prices are not going up.  If per candy cotton is being sold at Rs. 7000, it means that yarn prices should go up by Rs. 28 per kg. But the yarn price has increased only by Rs. 10-12,” he said.

No industry can incur loss so all of them have started importing cotton, he added.

Selvaraju further said that the government is already aware of the issue and had earlier instructed the mills not to “panic” on the situation.

This, he said, would impact the exports too.

Textile mills in the country consume around 25 lakh bales of cotton per month. Mills in the south alone use about 10 lakh bales a month. With area under the crop declining on the back of a drought in Maharashtra and Karnataka and pest attacks affecting output in Gujarat, Punjab and Haryana, cotton production would fall to a five-year low of 352 lakh bales for the 2015-16 season, Cotton Advisory Board (CAB) estimated in February this year. (KNN/ AR)