TN CM Stalin writes to PM Modi on cotton prices

Chennai: "Serious disruptions" in the textile industry in Tamil Nadu have prompted Chief Minister M K Stalin to call on the Centre to take a series of steps, including making mandatory for spinning mills and declaring cotton and yarn stockpiles to curb price rises.

Despite the Centre's announcement that the import duty on cotton will be removed, the situation has not improved, and cotton and yarn prices have continued to grow, Stalin wrote to Prime Minister Narendra Modi. 

"This precarious scenario has far-reaching implications for Tamil Nadu's textile industry. Due to unsustainable demands on their working capital and a price mismatch between the agreed price of supply to the buyer and the cost of production, a substantial number of spinning, weaving, and garment units face closure," he wrote in a letter issued by the state administration on Monday.

He described the growing unhappiness in the business and among weavers as "alarming" and called for a number of actions to address the situation. "As an immediate action, all spinning mills should make stock declarations for cotton and yarn necessary so that ginners and cotton traders may have accurate data on cotton and yarn availability," he told Modi.
He also wanted the spinning mills' cash credit limit for purchasing cotton to be increased from three to eight months per year. 

"Similarly, because banks calculate the purchase stock value at lower rates than the actual purchase/market rates in the market, margin money sought by banks at 25% of purchase value may be cut to 10%," Stalin noted.

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