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Mills want CCI to start sale of cotton through e-auction

CCI had temporarily suspended sale of cotton due to which several textile mills ran short of quality cotton as it was not available in the open market

BS Reporter  |  Chennai 

Mills in south India have urged the Union textile minister to direct the Cotton Corporation of India (CCI) to immediately commence selling of cotton through e-auctions.

The association has sought liberalisation of credit norms for e-auctions considering the current financial crisis facing the spinning mills was due to the glut in the yarn market, and a delay in getting subsidies and pending dues from states.

In a press statement today, T Rajkumar, chairman of Southern India Mills Association (SIMA), said the association had sent a representation to Minister of State for Textiles Santosh Kumar Gangwar mentioning that though the CCI had covered procuring major volume of good quality cotton from Telangana and Andhra Pradesh, it had however temporarily suspended the sale of cotton.

As a result, it said, there was a huge drop in the availability of cotton, and a large number of textile mills were facing shortage of quality cotton for their operations.

It said the CCI had procured 8.6 million bales of cotton under MSP operations, mainly from Andhra Pradesh and Telangana, and had sold only 300,000 bales so far. The CCI procurement was aimed at safeguarding farmer interests emerging from drop in cotton price.

Rajkumar also pointed out the rates quoted by CCI resulted in market speculation as the market rate was much below the price quoted by the CCI.

He further appealed to the minister to advise CCI to avoid quoting higher prices than the market.

Tamil Nadu accounts for one-third of the textile business in the country and the mills in the state account for 44 per cent of the total spinning capacity. The textile industry in the state is providing direct employment to over five million individuals, the release stated.

First Published: Tue, April 07 2015. 20:43 IST