SISPA urges CCI to sell cotton to MSME mills on priority

S Jagadesh Chandran, Secretary of SISPA also warned that selling cotton to traders leads to speculative practices, resulting in inflated prices and market instability.
Image used for representational purposes only
Image used for representational purposes only

COIMBATORE: The South India Spinners Association (SISPA) has sought an immediate intervention of the Cotton Corporation of India (CCI) to prioritise the sale of cotton to Micro, Small, and Medium Enterprise (MSME) spinning mills from July 1. The SISPA urged for the continuation of the present sale of cotton from the CCI for the next three months.

"The textile sector in India is at a critical juncture, grappling with significant financial strain. Numerous spinning mills have ceased operations due to liquidity crises, high operational costs, and market volatility. These challenges are compounded by a notable decline in export for yarn and textiles, as well as increased pressure from imports," said S Jagadesh Chandran, Secretary of SISPA.

He also warned that selling cotton to traders leads to speculative practices, resulting in inflated prices and market instability.

"Despite the challenges, there are promising signs of revival within the spinning sector. Recent increases in garment export orders have enabled many mills to resume operations, leading to a growing demand for cotton to meet production needs. Our request to the CCI is to refrain from diverting cotton stocks of 24 lakh bales, which is just one month of mill consumption. In the last three days, 2.5 lakh bales were sold to mills and if this trend continues in a month all stock will be sold. So we request to stop selling to traders and instead retain these stocks for exclusive sale to mills," he added.

"Cotton prices suddenly increased from Rs 58,000 to Rs 63,000 per candy four months ago, when c. At that time, we requested the Ministry of Textiles and CCI not to sell cotton to traders. Based on our request the Union Ministry of Textiles advised the CCI not to sell cotton to traders. Therefore, CCI stopped selling cotton to traders. As a result, the cotton price immediately dropped down to Rs 57,000 per candy and remained stable for the last four months. The cotton prices in the open market were also stable because CCI's prices acted as a benchmark. If CCI resumes selling to traders, the prices will rise again," he said.

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