Declaration of production holiday by A.P Spinning industry

After completion of the sale of cotton pertains to 2015-16 crop by A.P Cotton farmers, some of the multinational and local trading companies have resorted to hoarding the cotton and selling the same with a vertical increase in cotton price by 55%. Thereby the entire spinning industry in A.P is incurring heavy cash losses.

The main reason for this sudden and unusual increase of cotton price is due to allowing of multinational and local trading companies by Cotton Corporation of India (CCI) to participate in their daily cotton auction along with the spinning industry.

The price of cotton has been increased from Rs. 35000/- to Rs.48000/- and racing towards above Rs.50000/- mark. But the yarn price is not increasing commensurate with the increased cotton price and quoting at a normal international price.

Because of this parity in yarn production and marketing cost, the industry is losing heavily @ Rs. 25 to 30 per Kg yarn. The spinning industry is not in a position to bear such huge losses. Hence the General body of APSMA has unanimously resolved to declare one day per week “Production holiday”.

Accordingly, all 120 member mills of APSMA have decided to observe a full day production holiday on every Wednesday of the week.

With this kind of action by the spinning industry, cotton hoarders may release the cotton stocks at a reduced selling price. Otherwise, in order to save the industry from huge losses, the member mills of spinning industry have decided to observe 2 to 3 days per week production holiday in the coming weeks.

The spinning industry in Telangana & Maharashtra states are being survived from a stage of industry closure because of the immediate decision was taken by the respective governments to a direct reduction in the tariff by Rs. 2/- per unit of electricity consumption with immediate effect.

The A.P Spinning industry is urging the Govt of Andhra Pradesh come to the rescue of the industry in the similar manner of which the neighboring states have rescued their industry.

To come out of this ever faced situation by A.P spinning industry, APSMA is urging the Govt of Andhra Pradesh to take immediate steps for cotton availability from the clutches of hoarders.

Govt of Andhra Pradesh should take immediate measures for the release of Rs 272 crores which were already sanctioned in the first quarter of 2016-17 and also give budgetary sanction for the balance/pending subsidy amounts of Rs.1000 crores and above before a complete collapse of the existing major agro-based spinning industry.