SIMA seeks level playing field for cotton textile mills

The Southern India Mills' Association (SIMA) has appealed to the Centre to ensure a level playing field for Indian cotton textile mills before taking a decision on allowing cotton export under the open general licence (OGL) in the long run.

While stating that surplus cotton projected by the Cotton Advisory Board could be allowed under OGL with effect from January 1 to avoid artificial scarcity during the beginning of the season, the SIMA Chairman, Mr J. Thulasidharan, said the assurance given by the Empowered Group of Ministers on maintaining 2 ½ months closing stock for the cotton season 2009-10 was only in print and not implemented.

He said that in competing countries such as China, the Cotton Reserve Corporation protected the interest of the spinning sector by maintaining adequate buffer stock apart from disallowing any external agency to trade the Chinese cotton directly.

The Union Government should protect the domestic industry in a like manner. Unplanned export of cotton only led to hoarding and speculation resulting in a steep increase in the price of cotton and cotton yarn, which could not be passed on to the powerloom, handloom and garmenting sectors, he said

Voicing fear over the export of cotton under OGL, he said this move would encourage the few man-made fibre manufacturers to jack up the price thereby making even 100 per cent polyester and polyester cotton textile products costlier for the people below the poverty line.

He has appealed to the Government to provide facilities of hedging; and the Indian Cotton Reserve Corporation to maintain price stability and also the Indian Cotton Arbitration Rules to handle the disputes appropriately.

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