Tamil Nadu CM writes to PM, urges to control yarn price

Tamil Nadu’s Chief Minister MK Stalin has written a letter to Prime Minister Narendra Modi regarding consistent increase in cotton and yarn prices and has sought his intervention to improve the situation.

In a letter, MK Stalin said that as an immediate measure, stock declaration for cotton and yarn may be made mandatory for all spinning mills so that ginners and cotton traders can obtain actual data on their availability.

Few days ago, CM had urged the Union Government on the same issue.

The CM highlighted that the manufacturers of garments were suffering huge losses and many MSME units had already closed their operations. This had resulted in massive jobs losses in a sector that is traditionally an employment generator.

The letter further reads that though the Union Government had waived import duty on cotton till 30 September this year, it would take more than three months for the consignment to reach Indian ports after signing of the contract. Effectively, import duty waiver would be available only up to 30 June.

“Therefore, the Union Government may issue suitable clarifications that waiver of import duty will be available for all contracts entered up to 30 September,” MK Stalin urged. The cash credit limit of the spinning mills to purchase cotton might be extended up to eight months in a year.

He also pointed out that currently, banks provide a cash credit limit to the spinning mills for the purchase of cotton only for three months while the cotton availability with the farmers extends up to four months and thereafter, it is available in the market for another four months.

Similarly, margin money sought by the banks at 25 per cent of purchase value might be reduced to 10 per cent since banks were calculating the purchase stock value at lesser rates than the actual purchase/market rates.