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Mar 7, 2008

Text Ind Undergoing Worst Crisis

Textile Industry in Tamil Nadu is undergoing the worst crisis in its history and operations were paralysed due to abnormal cotton price coupled with acute power shortage prevailing from March one, Southern India Mills' Association claimed today.Cotton being a seasonal commodity, the mills procured the required cotton in November to February every year to produce the desired quality yarn and meet the customer needs. But this year,the mills could not cover even 20 to 30 per cent,SIMA Chairman Dr K V Srinivasan said in a statement here.

Operations were paralysed due to abnormal cotton price coupled with acute power shortage

Foreign buyers have been speculating the cotton price from the beginning of the cotton season and "paralysed the purchase of cotton by the domestic textile sector," he said They have covered cotton, like Shankar-6 for rs.23,200 per candy under forward cover, till Dec 2008, he said.Considering the employment of over 3.5 crore people in the industry across India,it was very essential to streamline cotton exports and also remove 10 per cent import duty and exempt cotton from the special Countervailing Duty of four per cent.

If the Centre failed to take necessary steps to control cotton prices,the industry would become sick throwing several crores of people out of job leading to industrial and social unrest, Srinivasan said.The government may consider allowing export only through Federations like Cotton Corporation of India, Maharashtra Federation, to ensure that only surplus cotton was exported after reserving the required quality and quantity of cotton for domestic sector, Srinivasan said.On power front, Srinivasan said that industry has been the worst hit in the current environment due to unprecedented "acute power shortage" prevailing in Tamil Nadu.

Tamil Nadu Electricity Board (TNEB) has announced one-day power holiday in a week, which was agreed upon by the industries.Though Power Minister, Arcot Veeraswamy had ensured uninterrupted power for the remaining days, TNEB, recently, has issued notice to all the textile mills to operate Gensets during peak hours in addition to power holiday, he said.Further,there were unscheduled shutdowns ranging from one to two hours in the normal period and all these put together would affect the production by 35 per cent in the State, totally upsetting the textile business, Sima chairman said.

The cloth imports have already doubled and the competing countries and other States would take advantage of the situation and grab all the customers, he claimed and said this would push the textile industry in Tamil Nadu into deep crisis Despite several representations and meetings, TNEB has not come out with a concrete proposal to distribute the shortage uniformally across the State, he lamented.SIMA has sent a representation to Chief Minister, M Karunanidhi, requesting him to intervene and streamline the system to minimise the losses incurred by the labour intensive textile industry, Srinivasan said.

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