The South India Spinners Association (SISPA) today appealed to the Central and Tamil Nadu Governments to take corrective action to save the Micro and Small Spinning Mills from permanent closure.


The Micro and Small Spinning Mills have downed their shutters as the availability of quality cotton are at a non-affordable cost and in spite duty-free access to import cotton mills struggle to run due to heavy losses and pose a threat to permanent closure.


The Spinning Sector is incurring huge cash losses on this day-to-day operation due to very high cotton prices and low yarn prices, SISPA President J Velan said in a statement here.

The domestic and imported cottons were sold at around Rs.1 lakh per candy (355 kg) and came down to Rs.82,000 for July 2022, again increasing to Rs.1 lakh, thus increasing by Rs.18,000 within the shortest time, he said.


The MSME mills are unable to even protect their production cost from cotton to yarn and are incurring a cash loss of Rs. 40 to Rs. 50 per kg of yarn produced and most of the member mills have closed due to the non-availability of cotton, Working Capital erosion and poor saleability of yarn and mills are on the verge of becoming Non-Performing Assets, if the present situation prolonged, Velan said.


Anticipating a positive response from Central and State Governments the mills are in distress situation due to heavy financial and raw material crisis, he said.Reason behind rates moving like a pendulum clock is because of speculators, traders and Multi Commodity Exchange of India Limited (MCX) and the Government should initiate policy measures immediately to protect the Spinning Sector.


The cotton should be removed from MCX Platform, MNC should not be allowed to procure domestic cotton as in China and Centre should ensure supply of cotton at a reasonable price throughout the year to the user industry and adequate buffer stock to be maintained for the domestic spinning sector, he said.