The Cotton Advisory Board at its meeting held on 17th May 2008 has estimated a record and bumper cotton production of 315 lakh bales for the year 2007-08.
The predominantly cotton-based Indian textile industry had been performing extremely well during the years 2003 to 2007, mainly due to the adequate availability of good quality home grown cotton.
But during the year 2007-08, apart from various other factors like sudden appreciation of rupee against US dollar, escalation in bank interest rate, slump in the local and export markets, the abnormal cotton price has totally paralysed the performance of the textile industry and in scenario, even the top ticket mills are incurring cash losses.
In a press release issued, Shri J.Thulasidharan, Deputy Chairman, The Southern India Mills’ Association, has appealed to the Government to immediately intervene and take necessary steps and make the Indian textile industry to derive benefit out of the home grown cotton.
He has stated that unlike previous years, this year many multi national cotton traders have entered into the Indian market and dominated the cotton purchases from the beginning of the season.
They have covered all good quality cotton not only for export purpose but also for selling the cotton in the domestic market.
In scenario, though the spinners are ready to pay the price, the traders are speculating the cotton prices and refusing to sell the cotton to the domestic spinners.
Since China is facing cotton shortage, the multi nationals have even speculated international cotton prices by covering major quantity of Indian cotton.
Shri Thulasidharan has informed that the Association and also its apex body, Confederation of Indian Textile Industry, New Delhi, have made a number of representations right from the beginning of the season to take necessary steps to control cotton prices. He has stated that all the spinning mills would be closed soon if the present trend continues.
Shri Thulasidharan further stated that Shankar-6, a major cotton variety grown in Gujarat normally used for producing 40s yarn, was priced at around Rs. 19,000 per candy during the years 2006 and 2007 and it is sold at Rs. 23,500 per candy, an increase of 24%.
The average yarn price per bundle of 4.54 kg of 40s hank yarn was Rs.568 during the year 2006 and Rs.558 during the year 2007 whereas, it is sold at only Rs.553, a decrease of 1% when compared to 2007 average price.
Similarly, J-34 cotton normally used for producing 20s yarn, which was sold at an average price of Rs.16,500 per candy during the year 2006 and Rs. 18,000 per candy during the year 2007, now is sold at Rs. 20,500 per candy, an increase of 14%.
20s hank yarn produced out of J-34 cotton was sold at an average price of Rs. 432 during the year 2006 and Rs. 431 during the year 2007, whereas the same is sold at Rs. 447, an increase of 4% when compared to 2007 average price.
