The Tirupur Yarn Manufacturers Association has called for support from the garment units in seeking steps by the Union government to change the role of the Cotton Corporation of India (CCI).

The China National Cotton Reserves Corporation maintains more than a year’s cotton stock and ensures stability in cotton prices. The CCI should, as such, not only procure cotton from the farmers at Minimum Support Price but also keep stocks and support the textile industry with stable raw material prices, the association said in a memorandum to the Apparel Export Promotion Council (AEPC) and the Tiruppur Exporters Association (TEA).

Office-bearers of the Tirupur Yarn Manufacturers Association met A. Sakthivel, chairman of the AEPC, and K.M. Subramanian, president of the TEA, on Saturday (September 19). They pointed out that many garment buyers and brands nominate specific ginners for cotton procurement, leaving spinning mills with limited access to credit.

The mills make upfront payments to buy cotton from the nominated ginners. However, many garment manufacturers continue to avail of credit from the mills for long durations. This has resulted in a significant working capital imbalance across the textile value chain, it said.

Yarn price is influenced by cotton price that accounts for 65%-70% of yarn manufacturing cost. The steep increase in cotton prices (around 30% in the domestic market and 50% in the international market) reflected in the yarn prices. With international cotton prices softening to 82.17 cents a pound from 91.55 cents a pound, yarn prices also declined to ₹379 a kg from ₹384 a kg.

Further, over 70% spinning mills could not modernise in the recent years as yarn exports were sluggish. Of the 45 million spindle working capacity in the country, over 20 million are more than 10 years old. If the mills do not modernise, there will be shortage of yarn, the yarn manufacturers reasoned.

In such a situation, the association sought the support of the garment sector for total removal of the 11% import duty on cotton and modifying the role of the CCI.

The garment industry should also ensure timely payments to the spinning mills within the mutually agreed credit terms. “We seek your cooperation in ensuring a more balanced payment mechanism across the value chain, particularly in view of the prevailing financial pressures on the spinning sector,” the yarn manufacturers association said.

The Tirupur Yarn Manufacturers Association has called for support from the garment units in seeking steps by the Union government to change the role of the Cotton Corporation of India (CCI).

The China National Cotton Reserves Corporation maintains more than a year’s cotton stock and ensures stability in cotton prices. The CCI should, as such, not only procure cotton from the farmers at Minimum Support Price but also keep stocks and support the textile industry with stable raw material prices, the association said in a memorandum to the Apparel Export Promotion Council (AEPC) and the Tiruppur Exporters Association (TEA).

Office-bearers of the Tirupur Yarn Manufacturers Association met A. Sakthivel, chairman of the AEPC, and K.M. Subramanian, president of the TEA, on Saturday (September 19). They pointed out that many garment buyers and brands nominate specific ginners for cotton procurement, leaving spinning mills with limited access to credit.

The mills make upfront payments to buy cotton from the nominated ginners. However, many garment manufacturers continue to avail of credit from the mills for long durations. This has resulted in a significant working capital imbalance across the textile value chain, it said.

Yarn price is influenced by cotton price that accounts for 65%-70% of yarn manufacturing cost. The steep increase in cotton prices (around 30% in the domestic market and 50% in the international market) reflected in the yarn prices. With international cotton prices softening to 82.17 cents a pound from 91.55 cents a pound, yarn prices also declined to ₹379 a kg from ₹384 a kg.

Further, over 70% spinning mills could not modernise in the recent years as yarn exports were sluggish. Of the 45 million spindle working capacity in the country, over 20 million are more than 10 years old. If the mills do not modernise, there will be shortage of yarn, the yarn manufacturers reasoned.

In such a situation, the association sought the support of the garment sector for total removal of the 11% import duty on cotton and modifying the role of the CCI.

The garment industry should also ensure timely payments to the spinning mills within the mutually agreed credit terms. “We seek your cooperation in ensuring a more balanced payment mechanism across the value chain, particularly in view of the prevailing financial pressures on the spinning sector,” the yarn manufacturers association said.

India should make efforts to be a price influencer in the international cotton market, said Lalit Kumar Gupta, Chairman and Managing Director of Cotton Corporation of India (CCI), in Coimbatore on Friday.

Inaugurating the bi annual cotton conference organised by the Indian Cotton Federation jointly with the Indian Cotton Association, he said all stakeholders of the Indian cotton sector should focus on productivity, quality, transparency, differentiation, and price discovery.

India has the scale as it is one of the top five cotton producers. But, its production does not meet the consumption needs. “Our objective should be clear – to be a globally competitive producer.” For this productivity is important. Under the Mission on Cotton, about five lakh hectares are targeted in the first year to increase productivity. In a high density planting tried on 25,000 ha, the yield achieved is 15 quintal of seed cotton per acre.

In terms of quality, the global market needs fibre quality that is consistent and contamination free. To reduce contamination, the entire industry should work together.

Another critical factor is price discovery. There should be transparency and standards. “We have fragmented data. We need actual data and this information should be integrated with the entire system,” he added.

The CCI procured 105 lakh bales of cotton from the market this cotton season and has sold 94 lakh bales. It has about 17 lakh bales with it, he said.

K.V. Srinivasan, former International Textile Manufacturers’ Federation president, said the Indian textile industry got a boost in the 1990s because of higher cotton yield in the domestic market. “The time has come for a technology boost to improve cotton yield again to compete with Brazil, the US and China (in cotton production),” he said.

Of the total cotton produced globally, 74 % comes from four countries, including India that has 38 % of the world’s area under cotton in it. If the yield improves, India will be the leader in cotton production, he said.