The unprecedented rise in raw material prices has compelled the government to order a probe into cotton arrivals in the market. Exporters have also sought long-term policy measures to control rising prices. The prices do not factor in moisture and trash conditions. Excessive moisture can cause an additional 1 per cent loss and a minimum 3 per cent in excessive trash. This leads to Rs 119,600 to Rs 121,680 loss for spinners, says K Venkatachalam, Chief Advisor, Tamil Nadu Spinning Mills’ Association.

Release of cotton in calibrated quantities is adding to their woes, he adds. He advises the government to identify where the cotton is being stopped or hoarded. Spinners have also urged the government to remove cotton from the list of commodities traded on exchanges and make it available to farmers and mills, who are the only stakeholders.

Representatives of mill associations have also urged the government to direct the Cotton Corporation of India (CCI) to buy the cotton from farmers and to sell it only to mills, even in smaller quantities. The CCI should not to sell cotton to traders and multinationals, they advise. Manifold increase in all costs has resulted in an increase in yarn prices. Due to the increase in cotton prices, the working capital of all the mills is reported to have eroded and this has also resulted in a severe financial crunch for mills in buying and stocking cotton, Venkatchalam adds.