Spinning mills restive over spiralling cotton price

June 18th, 2008 - 10:19 pm ICT by IANS  

A file-photo of Manmohan Singh

Ahmedabad, June 18 (IANS) Cotton spinning mills in Gujarat are planning to observe a day’s closure in protest against spiralling cotton prices and the government’s failure to mitigate its difficulties. Sunil Jain, managing director of Vadodara-based IC Textiles, said the Confederation of Indian Textile Industry (CITI) discussed the current scenario in the textile industry in a crucial meeting held in Mumbai Wednesday.

When contacted, CITI secretary-general D.K. Nair said the top committee of the body discussed the worsening situation in textile industry but “no final decision” has been taken. The decision on protest programmes would be taken after negotiating with the members who did not attend the meeting and would be announced Thursday, he said.

Jain told IANS that his unit has downed shutters since Tuesday because of high cotton price. “In the last one week cotton prices have jumped from Rs.24,000 to Rs.26,500 per candy which is 60 percent above the minimum support price fixed by the government. At such prices, we cannot recover even the direct cost of production,” he said.

Industry associations and leaders met Prime Minister Manmohan Singh twice on the issue. They also met the finance, commerce and textile ministers, but so far there was no positive response.

Jain said the government should ban cotton exports to bailout the cotton spinning mills in the country. Otherwise, the government could consider levying a 15 percent export duty on cotton exports.

The dim prospects for cotton spinning units have compelled city-based Gujarat Ambuja Exports Ltd (GAEL) to shelve its plan to add 25,000 spindles to its export oriented spinning unit at Himmat Nagar, about 70 km from Ahmedabad.

GAEL executive director P.G. Makhija recently told a textile magazine: “The industry is in for a major shake up. Cotton cultivation, yield, prices and market flows are changing at mind blowing speed. Add to this the futures trading, oil crisis, over capacity, bilateral and multi-lateral economic treaties and confused policies of the government. The situation in India is going to be chaotic.”

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