High prices of cotton & yarn unsettle spinners, knitters

Increase in prices of cotton and yarn in recent days has unsettled spinning and knitwear industry in Tamil Nadu.

The spinning mills blame the Cotton Corporation of India for its trader-friendly policy which has led to speculation, hoarding and price rise. The knitwear manufacturers and exporters in Tirupur said increase in yarn prices are much more than the proportionate increase in cotton.

They have asked the Union government to regulate yarn exports as value addition in conversion of yarn to garment is more than five times. The knitwear manufacturers are also planning to ask their buyers to jack up price by 18%-20% to meet rising yarn cost.

J Thulasidharan, chairman of the Southern India Mills? Association (SIMA) said, ?abnormal increase in cotton prices has been the root cause for increase in yarn rates. Listing the reasons for rise in cotton prices, Thulasidharan said faulty pricing and delivery policies of the Cotton Corporation of India ( CCI) in the recent past has lead to such a situation.

He said, the cotton based Indian textile industry has been passing through an unprecedented crisis due to abnormal increase in cotton prices on account of speculation and hoarding by multi national traders. Pro-cotton-trader policies by the (CCI), 5% export incentive offered for cotton, huge discount with liberal credit terms for bulk purchase, over 40% increase in minimum support price and liberal export of raw cotton are some of the other reasons for the crisis in Indian textile sector, Thulasidharan said.

He said in 2009-10 season, cotton prices are ruling high, so much so that as of now the market price for Sankar-6 cotton kapas per quintal is Rs 3,600 as against the minimum support price of Rs 2,850.

In addition, liberal export of raw cotton export has further complicated the problem for textile markers.

Meanwhile, at a recent extraordinary general meeting of the Tirpur Exporters Association (TEA), the association president A Sakthivel said that there has been abnormal increase of yarn prices without any correlation with its input cost.