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CITI urges govt to ease cotton yarn situation
22
Jul '11
Spinning industry of the country which had a stock of more than 500 million kgs of cotton yarn following last year's restrictions on exports have reported significant easing of the cotton yarn stock position. In a statement here Shri Shishir Jaipuria, Chairman, Confederation of Indian Textile Industry (CITI) stated that from 23rd May 2011 onwards spinning mills all over the country had resorted to significant production cuts.

Currently 25–30 per cent of capacity for cotton yarn production in the country is lying closed. Meanwhile, restriction on export of cotton yarn has been lifted by the government and current cotton yarn exports are comparable with those of the same period last year. Shri Jaipuria added that there has also been some positive movement in domestic demand for cotton yarn and he expects this trend to continue.

Shri Shishir Jaipuria explained that from a peak level of 500 million kgs, cotton yarn stocks with the mills have now come down to around 350 million kgs and he expects these to come down further in the coming months. He added that the festival season in the country starting from September onwards is expected to see significant improvement in demand for all textile products and this would also help the spinning sector to dispose of their accumulated stocks of cotton yarn.

Shri Jaipuria stated that CITI has requested government for a comprehensive relief package for the spinning industry in order to tackle the losses suffered by the industry in recent months because of restrictions in cotton yarn exports, fluctuation in cotton and cotton yarn prices and accumulation of stocks both of fibre and yarn. Shri Jaipuria stated that with the improvement in the demand position, spinning industry is expected to come out of its present problems during the second half of the current fiscal.

However, the mills will find it extremely difficult to repay loans and find working capital in the coming months because of the huge losses they suffered during the first half of the fiscal.

He stated that CITI has sought a two year moratorium or repayment of loans and interest and a few other facilities from the Reserve Bank of India, in order to avoid the accounts becoming Non Performing Assets and added that the industry is confident that the current challenges can be met with the help of the relief which the industry has sought from government and the RBI and this will help the industry to revive its operations in full during the coming months and to avoid retrenchment of any workers.

Confederation of Indian Textile Industry (CITI)

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