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Our Bureau

Coimbatore, May 13

South India Small Spinners Association (Sisspa) has said that the abnormal increase in cotton prices and steep fall in textile exports in recent times due to hardening rupee have left many spinners in a financial squeeze.

The sliding yarn market has made matters worse for the spinners with the yarn prices in export market ruling at least 7 to 8 per cent below the domestic market prices. This scenario has forced many to jump to domestic market sale, thereby causing the market glut, the Sisspa has noted in a memorandum addressed to the Prime Minister.

With bad market conditions hitting their bottom line, spinning units are either defaulting in loan repayment to bankers or their promoters resorting to high-cost borrowing to honour their commitment to bankers.

Both courses are proving financial disaster for the mills, the association said and asked the government to come out with a two-year loan moratorium for the mills.

The Sisspa memorandum has also pointed out that the customs duty reduction for capital goods imports under the EPCG scheme from 5 to 3 per cent announced by the government some time ago is yet to be effected.

Welcoming the Prime Minister’s recent announcement on duty-free tariff preference scheme for least developed countries that provided for preferential market access for products such as cotton, the Sisspa memorandum, however, wanted the former to impress upon the Commerce and Finance Ministries to issue necessary orders.

More Stories on : Textiles | Industry Associations | Tamil Nadu

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