Indian textile and apparel Industry has continuously been facing several challenges since last ten years owing to fluctuations in the raw cotton prices, which accounts for 60 per cent cost for the yarn.
This makes the downstream industry, especially the spinning sector, vulnerable as it increases the cost of yarn prices and makes them quite unpredictable in the highly cost-competitive international market.
T Rajkumar, Chairman, Confederation of Indian Textile Industry (CITI), has appealed to the Prime Minister to intervene so as to stabilise the cotton prices, which have soared to the peak in the last 11 cotton seasons.
He also appealed for Cotton Price Stabilisation Fund Scheme comprising 5 per cent interest subvention or loan at NABARD rate of interest, reduction in margin money from 25 per cent to 10 per cent and increase in the cotton working capital limit from 3 months to 9 months.
Indian Cotton Textile Industry has always been at the helm of affairs due to its inherent strength of availability of raw cotton in abundance at competitive prices and the presence of the entire cotton value chain.
This year the export of cotton may cross 100 lakh bales due to US sanction on Xinjiang Chinese cotton, which accounts for 10 per cent of the world cotton production.
The 2021-2022 cotton season started with an opening stock of over 100 lakh bales and the estimated production of cotton is about 355 lakh bales.
There will be a consumption of about 330 lakh bales and the textile industry may import about 10 lakh bales, leaving about 135 lakh bales for export and carry-over stock. This will result into not only having a shortage of cotton in the international market but also abnormal speculation in the cotton prices.
Raja M. Shanmugham, President, Tirupur Exporters Association also sent a representation with an appeal to the Prime Minister to direct Cotton Corporation of India Limited to function for the wellbeing of cotton farmers and textile industry.
“MNCs are playing a hatched game in the cotton trading against the interests of our textile industry by way of hoarding a huge stock during the cotton yielding season by using their very low cost of international fund and triggering for increasing of cotton price,” he said.
He further added that CCI needs to be directed to protect the interests of farmers at the first instance and should equally act as a facilitator or catalyst to accelerate the growth of value chain of textile industry and added that being a popular nation, India needs more jobs to accommodate their citizens and to ensure the livelihood of household.
He further said CCI needs to open its Supply Chain Centre based on the demand request to facilitate the speedy availability of cotton at the user end.
