Recent increases in garment export orders have allowed many mills to resume operations, leading to a higher demand for cotton.
The South India Spinners Association (SISPA) has sought the intervention of Giriraj Singh, Union Minister for Textiles, to prioritise the sale of cotton to micro, small, and medium enterprises (MSME) spinning mills from the Cotton Corporation of India (CCI). This request comes ahead of the CCI’s plan to start selling cotton to traders from July 1.
The textile sector in India is facing significant financial challenges, with many spinning mills shutting down due to liquidity issues, high operational costs, and market volatility. These issues are further exacerbated by a decline in yarn and textile exports and increased import pressure, as stated by SISPA secretary S Jagadesh Chandran in a letter to the Union Minister.
Despite these difficulties, there are signs of recovery in the spinning sector. Recent increases in garment export orders have allowed many mills to resume operations, leading to a higher demand for cotton.
Chandran noted that selling cotton to traders leads to speculative practices, which inflate prices and create market instability. This situation undermines the sustainability of the textile sector and threatens the viability of mills. He pointed out that four months ago, cotton prices unexpectedly rose from Rs 58,000 to Rs 63,000 per candy. At that time, SISPA requested the Ministry of Textiles and CCI to refrain from selling cotton to traders. Following this request, the Ministry advised CCI to stop selling cotton to traders, which led to a drop in cotton prices to Rs 57,000 per candy, maintaining stability for the last four months.
Chandran explained that stable prices in the open market were due to CCI’s benchmark prices. He warned that if CCI resumed selling to traders, prices would rise again. Chandran appealed to the Ministry of Textiles to support their request for the CCI to hold unsold cotton stocks from July 1 for three months for MSME spinning mills. He emphasised that this proactive measure would maintain stability, resilience, and sustainability in India’s textile value chain, contributing significantly to the nation’s economic growth objectives under the Make in India initiative.