Cocoon farmers in Tamil Nadu have been affected by the imports of silk from China. The earlier import duty of 40 per cent for silk from China has been brought down to 10 per cent. Fluctuations in price, non-availability of laborers, and an increase in input costs are posing a major threat to sericulture. The production cost of cocoon has gone up whereas the market rate has come down over the months.

Though sericulture is lucrative by nature, it faces various problems in cultivation and marketing. The success of sericulture is mainly based on proper and highly efficient marketing, which assures good prices to farmers. Efficient marketing helps in minimising wide fluctuations in cocoon prices. Fluctuations are due to variations in cocoon quality, absence of quality control, intervention of middlemen and poor marketing facilities.

The prices paid to cocoon farmers continue to hover around a narrow range, despite the award of prices to different grades of cocoons through bidding in an open auction. Increased production of mulberry cocoons can lead to an increase in foreign exchange earnings besides giving a larger employment opportunity to farm families, silk yarn reeling silk weavers and the like in the silk industry.