The Southern India Mills’ Association (SIMA) today appealed to the Gujarat Government and Union Textile Ministry to permit Agriculture Produce Market Committee (APMC) also to procure and pay the cotton bonus of Rs.110 per 20 kg.

While appreciating the Gujarat Government for compensating the crop loss to farmers in the form of bonus, SIMA Chairman, M. Senthilkumar, in a statement, cautioned that the cotton bonus implementation through Cotton Corporation of India (CCI) would result in speculation.

If the scheme was implemented through APMC, private ginners would immediately procure cotton and there would be a regular flow of supply in the market, he said, and cited that CCI had been historically quoting a price higher than the actual market price and commenced sale only after a period of one or two months of procurement.

Therefore, it would be better to implement the cotton bonus scheme through APMC to ensure stability and smooth supply of cotton, Senthilkumar said.

The fall in yarn export had created surplus domestic supply and therefore, large numbers of mills across the nation were forced to cut down production by 10 to 30 per cent.

Stating that the increasing trend in import of cotton yarn and fabrics had also affected the domestic market demand, he claimed that in this scenario, the implementation of cotton bonus system for the farmer in Gujarat through CCI had already pushed the cotton price by a few hundred rupees.

With Gujarat being the largest cotton growing State in India, if the cycle of sale was disrupted, it would greatly affect the entire textile value chain, he pointed out.

The entire knitting and garment sectors predominantly need a continuous flow of Gujarat cotton at a stable price (slightly lower than international price) to sustain the smooth functioning of knitting and garment sectors, Senthilkumar said.