The Madurai Spinners Association has sought removal of import duty on cotton and cotton waste, to prevent mills going into the red.
The association, in a statement, said that with the withdrawal of subsidy in the US, sowing of cotton has reduced by 25 per cent and the world has lost the comfortable position in the supply of cotton.
Consequently, the rate of cotton has increased abnormally by 40 per cent from 52 cents per lb to 70 cents. This is reflected in Indian cotton rates with the price going up from Rs 18,000 per candy to Rs 20,500 per candy.
As this is expected to go up further, there will be increase in raw material cost. With the appreciation in the value of rupee, garment exporters would not be able to pay the right price for yarn. This will hurt the economics of ailing spinning mills.
