Tough time still continues
With cotton prices ruling high and yarn prices showing no improvement, textile mills continue to face hard times, according to industry sources here.Though cotton arrivals in the new season have started, prices remain high, although there is a marginal decline with respect to some varieties. Cotton yarn prices have also not improved. The problem is compounded by frequent power cuts: capacity utilisation has come down by 10 to 15 per cent over the last three months. A number of small units have stopped production. Many small-scale spinning units operate in the rural areas and a number of them in the district have stopped production in the last two to three months. “We are unable to meet the production costs,” says a small-scale spinner. Second hand spinning machines are now available at half or just one-third of the price that ruled eight to nine months ago. Not many new projects have come up. These are signs that point to the fact that the industry is not doing well. “This quarter can turn out to be one of the worst periods in the decade,” says K.V. Srinivasan, chairman of the Southern India Mills’ Association (SIMA). Though the phase is expected to pass, the government should meanwhile initiate measures to revive the industry and stabilise the rupee value vis-À-vis the dollar, Mr. Srinivasan says.
SIMA has sought relief from the Central government not only for exporting units but for those that cater to the domestic market. Many mills could become unsustainable unless a one-year moratorium is not given to the units to repay loans.The associations have sought 4 per cent interest subvention, on a par with exporting units, for domestic mills. While the State government should take measures on the power front on a war-footing, the Centre should help the units with respect to other issues, they say. Evolving a mechanism to ensure that domestic industry will have an advantage with regard to home-grown cotton is one of them. The import duty on cotton should be reduced and incentives for cotton exports should be removed.
