In the last eight years, the cotton-based Indian textile industry has been facing acute crisis because of high volatility in cotton prices especially during the off season that starts from May to September. Though the cotton year is October to September, more than 80 per cent of cotton arrive in market between November and March.
Due to financial constraints and three months credit limit facility extended by banks, spinning mills are forced to procure cotton at high for at least five months. The stagnated growth in cotton textile industry and exports is caused mainly due to volatility in cotton prices. Since 2007, the industry has been pleading with the Central fovernment to announce cotton fibre security policy after removal of cotton from Essential Commodities Act and by extending a low cost working capital fund and ensure adequate stock to use ratio of cotton to have a level playing field in the globalised environment. However, so far no decision has been taken.
Against this background, a 19-member delegation led by Vanathi Srinivasan, State General Secretary, BJP, Tamil Nadu and M Senthilkumar, Chairman, The Southern India Mills’ Association (SIMA) met the Union textile minister, Smriti Irani and submitted a joint memorandum. The chairman, SIMA has stated that based on the collective decision taken by 26 textile Associations across the value chain in the country, it was unanimously decided to insist the government to direct the Cotton Corporation of India (CCI) to procure 70 to 80 lakh bales of cotton during the peak season when the Indian cotton price rules lower than the international price, retain cotton as buffer stock and sell this quantity only to actual users between May to September.