Textile mills cry foul over increased cotton adulteration

Ginners mixing lower quality cotton with higher quality one to reduce loss in margin

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Textile mills in north and south India are crying foul over increased adulteration in cotton procured from Gujarat.

Cotton farmers are holding on to raw cotton waiting for better prices. This has resulted in a price disparity between raw cotton made available to ginners and finished cotton produced by ginners. Ginners are mixing lower quality cotton with higher quality cotton to reduce their losses.

Mills and traders buying cotton from Gujarat said the usual rate of adulteration of 10-15 per cent had climbed to 40 per cent this year. Increased adulteration is also being reported in Maharashtra.

“Ginners are losing Rs  500-700 per bale of raw cotton. Many ginners are mixing lower quality cotton to reduce their loss. Yet their returns are not good,” said Arvind Pan, vice-president of the Saurashtra Ginners’ Association (SGA).

A bale of 170 kg raw cotton contains 32 per cent lint, 63 per cent seed and another 5 per cent goes waste. The cost to ginners is Rs 8,500 per bale and Rs 500 for production. Ginners are being offered Rs 8,000-8,200 per bale for ginned cotton. After adulteration, the loss is being reduced to Rs  200-300 per bale.

“Textile mills are forced to import more cotton.  Good quality cotton, especially from Gujarat, such as Shankar 6, is being mixed with lower quality cotton,” said members of the Northern India Textile Mills' Association (NITMA).

Confirming that mills in south India had begun booking imports from Africa, K Selvaraju, secretary-general of the Southern India Mills Association (SIMA), said, “There have been rampant quality issues, especially from Gujarat. A large number of ginners are mixing waste cotton with virgin raw cotton. Mills have begun booking import contracts and this could increase if the adulteration does not stop.”

Selvaraju added adulteration had increased from 15 per cent of total arrivals in south India to almost 50 per cent this year.

Raw cotton prices have risen from Rs 800 to Rs 980 per 20 kg during the current season. Generally prices decrease for a few months after the new arrivals. But this year the crop is damaged by pests and raw cotton prices are on the rise.

A Mumbai-based industry expert said, “Raw cotton prices have gained so far for want of good quality cotton. Moreover, the government has declared a bonus, which increased the expectation of farmers, and they are not selling cotton at lower rates.” The Centre has increased the minimum support price (MSP) for raw cotton to Rs  810 per 20 kg.

Last month, the Gujarat government declared a Rs  110 bonus on the MSP, which set the price of cotton at Rs  920 per 20 kg. Farmers are not willing to sell cotton below Rs  950 and have been demanding Rs  1,100 per 20 kg.

Moreover, ginned cotton prices have not increased because of weak export demand and they rule at Rs  34,000 per candy of 355 kg. Bharat Boghara, who owns a ginning unit in Jasdan, said, "Ginners will be able to earn profits only if cotton prices rise over Rs  35,000 per candy."