Coimbatore Cotton Crisis: Traders Outpace Mills in Procurement, Spinning Sector Seeks Urgent Intervention
In a startling development from Coimbatore, the heart of India's textile industry, traders have procured a massive 32.5 lakh bales of cotton between January and March this year. This figure dramatically overshadows the 18 lakh bales purchased by spinning mills during the same period, highlighting a severe imbalance in the market. The South India Spinners' Association has raised alarm bells over the sustainability of the spinning sector, urging immediate action from authorities.
Mounting Cost Pressures and Price Disparities
The association has formally requested the Cotton Corporation of India (CCI) to ensure direct supply of cotton to mills at a fair price and to implement measures preventing bulk buying by traders. This move aims to stabilize raw material access for mills, which are grappling with unprecedented cost escalations.
According to S Jagadesh Chandran, honorary secretary of the association, cotton prices have surged from Rs52,000 per candy (356kg) on March 1 to Rs63,000 by April 6. This represents a sharp increase of Rs11,000 per candy in just over a month. The spike is attributed to global market trends, rising crude oil prices, higher transport costs, and other input cost escalations.
However, the price rise for finished products has not kept pace. For instance, 40s cotton yarn prices increased only from Rs265 to Rs290 per kg, a mere Rs25 rise. Similarly, polyester fibre prices jumped from Rs101 to Rs131 per kg, while viscose staple fibre climbed to Rs188 from Rs168 between March 1 and April 1. 60s polyester viscose yarn prices saw an increase from Rs218 to Rs235 per kg. These figures reveal a critical mismatch between soaring input costs and stagnant output prices, squeezing mill profitability.
Operational Challenges and Labor Shortages
Compounding the financial strain, operational challenges are mounting. Migrant workers from West Bengal, Assam, and Odisha have returned home to participate in voting processes. With uncertainty over their return, many spinning mills are operating at only around 50% capacity. This labor shortage exacerbates production inefficiencies at a time when the sector can least afford it.
In response, the association has written to Union Railway Minister Ashwini Vaishnaw, seeking the operation of special concessional trains to facilitate workers' travel and ensure their timely return. This intervention is seen as crucial to restoring full operational capacity.
Policy Demands for Sector Sustainability
Beyond immediate supply and labor issues, the South India Spinners' Association has outlined broader policy demands to sustain the spinning sector:
- Removal of the 11% import duty on cotton to alleviate cost pressures.
- State intervention to regulate input costs and review electricity tariffs, which significantly impact operational expenses.
- Enhanced oversight by the CCI to ensure fair pricing and prevent market distortions caused by trader dominance.
The association emphasizes that without these measures, the spinning sector's viability is at risk, potentially leading to job losses and reduced competitiveness in the global textile market. The call for action underscores the urgent need for balanced policies that support both raw material producers and value-added manufacturers in India's crucial textile ecosystem.
