Tamil Nadu urged to shield MSMEs from cotton price rise
today Sep 14, 2018
The South India Spinners Association (SISPA) recently urged the Tamil Nadu state government to formulate a policy to protect micro, small and medium enterprises (MSMEs) following the rise in cotton prices. The state should ensure a buffer stock of cotton and an affordable raw material pricing mechanism, the association said in a press release.
The rise in cotton prices benefits multinational companies, traders and the Cotton Corporation of India, the release quoted the SISPA president SK Rangarajan as saying.
Companies and traders buy cotton at the minimum support price, hoard the stock and inflate the prices later affecting end-users and farmers, he said. The SME mills lack the financial capacity to buy cotton and store it.
In April, the price of cotton hovered around ₹38,000 per candy-level and reached Rs 48,000 in June, he said, adding that the SME sector is unable to repay bank loans, resulting in non-performing assets.
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