30 March 2022, Mumbai:
The predominantly cotton based textile industry is facing a long drawn recession on cotton front as the cotton price has increased from Rs 44,500/- per candy in February 2021 when the 11% import duty was levied on cotton to Rs 90,000/- per candy now.
The steep increase in cotton price and its impact on prices of yarns and fabrics is severely impacting the potential growth of the cotton textile value chain.
Though the industry could manage the unprecedented COVID pandemic challenges with various policy interventions relating to export especially RoDTEP, RoSCTL etc., the industry started incurring cash loss and facing difficulty in meeting the export commitments.
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It is feared that the industry might face cotton shortage during August to October resulting in industrial unrest.
There is no reliable data available regarding the stock maintained by the kapas traders, ginners and cotton traders.
In the case of spinning mills, only around 40% of the mills provide data to the office of the Textile Commissioner.
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Therefore, the cotton traders are hoarding the cotton and speculating the price on a daily basis taking advantage of futures trading in MCX and NCDEX.
Though the cotton prices occasionally move in tandem with international price, quality cotton is not sold and mills started facing shortage.
Therefore, the industry has been demanding to withdraw the 11% import duty to have a level playing field, sustain the export performance and compete with the cheaper imports from countries like Bangladesh.
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In a joint Press Meet held today at SIMA Conference Hall, Coimbatore, Mr.T.Rajkumar, Chairman, Confederation of Indian Textile Industry (CITI), Mr.Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA) and Mr.Raja M Shanmugam, President, Tirupur Exporters’ Association (TEA) addressed the Press and briefed regarding the grave situation being faced by the entire cotton textile value chain across the country.
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