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20 May 2019, Edition - 1406, Monday

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Coimbatore

Small mills urge govt to safeguard domestic MSME with new policy

Covai Post Network

Coimbatore : The South India Spinners Association (SISPA) today urged the Government to formulate a policy to safeguard the domestic MSME sector by holding buffer stocks of cotton and ensuring an affordable raw material pricing mechanism.

Due to abnormal increase of cotton prices, the SME Mills in Tamil Nadu manufacturing cotton yarn have curtailed their production during night shifts and weekends and the skyrocketing of cotton prices every year during the off season has affected the SME mills in Tamil Nadu, it said.

The beneficiary of the spike in cotton prices are multinational companies (MNC) traders and Cotton corporation of India (CCI, SISPA president, S K Rangarajan said in a statement here.

Stating that neither the end user industry nor the farmer was benefited, he said that cotton during the peak arrival season was procured from farmers at MSP rates and hoarded by MNCs, traders.

The SME mills do not have the finial capacity to buy cotton and store till the next season. After the cotton season gets over the above companies unilaterally create an artificial vacuum in the market and within a month they inflate the price of cotton by nearly eight to ten thousand rupees a candy, he claimed.

During April 2018 the cotton prices were ruling around Rs. 38,000 per candy level whereas the by the end of June it has reached Rs.48,000 per candy, he said, adding that the SME sector was unable to repay their bank loan resulting in NPAS.

The Government should allow calibrated export of cotton after adjudicating adequate buffer stock of cotton for the domestic industry.

“The monopolistic attitude of these MNCS and CCI is resulting in lakhs of workers losing their livelihood in the rural areas of Tamil Nadu, “he said.

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