Ginning mills cut production due to higher cotton prices

All the mills in Gujarat are operating at 20% capacity.

Ginning mills in Gujarat are feeling the pinch of higher cotton prices. Majority of ginning mills in Gujarat have already cut production substantially as they are incurring huge financial losses due firm cotton prices. As per the industry estimates, ginning mills are currently utilising only 20 per cent of their production capacities, while the rest 80 per cent capacity remains unused.

Minimum Support Price (MSP) for cotton has been fixed at Rs. 575 per 20 kg. "We can afford to buy cotton only at Rs. 550 per 20 kg.

Considering the MSP of Rs. 575, ginners have to incur a loss of Rs. 25 per 20 kg. As a result, many ginning mills are currently operating at

20 per cent capacity," said Dilip Patel, president, All Gujarat CottonGinners' Association.

At present 20,000 to 25,000 bales a day go for ginning and pressing as against the 80,000 bales a day same time last year. "Gujarat has around 1,100 ginning mills. Large number of mills are closed and all those operational are working in one shift," said Arun Dalal, owner of Arun Dalal & Co, an Ahmedabad-based cotton trading firm.

It may be mentioned here that ginners along with other stakeholders of cotton industry had demanded rationalisation of cotton MSP couple of weeks back. Ginners in Gujarat also kept their mills closed for few days to pitch for their demand.