The Southern India Mills' Association (SIMA) has urged the minister for textile Santhosh Kumar Gangwar to review the e-auction policy of Cotton Corporation of India (CCI). SIMA suggests that CCI should offer about 50,000 bales, in flexible lot sizes and in multiple of 100 bales, in each centre and each variety of cotton, to support the small industry. SIMA has also suggested government give priority to SMEs and reduce the difference in the cost of cotton procured by SMEs and large industry players.

The spinning mills in South India, especially, Tamil Nadu were facing a crisis due to several factors such as glut in the domestic market, continuous fall in yarn exports since the past 13 months, etc. Other states have announced attractive industrial polices by various states enabling industries to have cost advantage to the tune of Rs 20 per kg of yarn, etc., which is not the case in Tamil Nadu. Besides, there has been undue delay in disbursing TUF subsidies.

The association stated that investments worth Rs 70,000 crore were under severe stress so, all textile mills, particularly spinning mills were maintaining a stock inventory of up to 30 days. In this situation, CCI’s e-auction policy was affecting the small and medium spinning mills seriously. Also, the association has been receiving complaints from small and medium size mills and they were finding it difficult to procure cotton from CCI.

T Rajkumar, Chairman, SIMA, has urged the minister to instruct CCI to maintain adequate stocks till the onset of new season. This would help maintain stability in cotton prices and also enable the SMEs to get continuous supply of cotton. Also, these SMEs have no access to imported cotton, further putting them at a disadvantage.