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Are India’s Textile Mills Short on Cotton?

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Textile mills in Telangana, India, are allegedly running out of raw materials, contradicting a Cotton Association of India (CAI) estimate in February that put the country’s total cotton surplus for the year 2014-15 at nearly 16 million bales.

Sushil Sancheti, treasurer of the Telangana Spinning & Textile Mills Association (TSTMA), on Apr. 16 told The Hindu that cotton stock at the southern state’s 32 mills would run out in 10 days.

That means the mills will have little to no inventory by this weekend, unless the state-run Cotton Corporation of India (CCI)—which has so far acquired around 8.7 million bales of cotton from farmers—puts more bales up for sale.

According to The Financial Express, Confederation of Indian Textile Industry (CITI) Chairman Prem Malik sent a letter to Textile Minister Santosh Kuman Gangwar two weeks ago, alerting him to a shortage of cotton in Telangana, as well as in the states of Andhra Pradesh and Maharashtra. “The local mills are forced to get cotton from distant places, incurring additional transportation and other costs,” he wrote.

The CCI, meanwhile, has insisted there is no scarcity of cotton in the domestic market, noting that up to 50,000 bales are put up for sale per day nationwide. The TSTMA, however, argued that the agency held onto stock between November and March and has since limited nationwide sales to 3,000-5,000 bales per day.

Something isn’t adding up.

A statement released by the CAI urged CCI to start “aggressively” selling bales. The Southern India Mills Association (SIMA) has also criticized CCI for causing a cotton shortage and the Cotton Textile Export Promotion Council (TEXPROCIL) has demanded that the agency sell at least 50,000 bales per day for 100 days through e-auction.

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