People's Democracy

UNPRECEDENTED RISE IN COTTON, YARN PRICES

Tirupur Bandh Warns UPA Govt

S P Rajendran

The textile cluster of Tamilnadu, including Tirupur, the knitwear capital of the country, observed a powerful 48 hour bandh on September 24 and 25 in protest against the continuing rise in the cotton and yarn prices.

Tirupur is a textile city and also an important trade centre of India, and has  gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear. The city emerged as the knitwear capital in three decades. Exports from Tirupur, which provide employment to over five lakh people directly, have crossed the Rs 12,000 crore mark. Tirupur is thus the lifeline for million of people in Tamilnadu. The knitwear industry, which is the soul of the city, has created millions of jobs for all class of people. He we have nearly 3,000 sewing units, 450 knitting units, hundreds of dying units, and other ancillary units which are uncountable.

PEOPLE’S LIFE

TARGETED

For this lifeline of millions of people in Tamilnadu, cotton and cotton yarn are evidently the main resource materials. But the neo-liberal policies of the UPA government have now targeted these very materials and now the entire textiles and knitwear industry in the region is under attack. This is pushing all these people to the verge of starvation.

India is the second largest producer as well as second largest shipper of cotton in the world. The country expects cotton production to be around 35.5 million bales (1 bale = 170 kg) in 2010-11, which would be an increase of 4 million bales compared to the 31.5 million bales is 2009-10.

However even though this is a good trend in cotton production, a planned scarcity has been created in the domestic market, due to the blind exports and the speculative trading in the raw material at the national and international levels.

India is now exporting 5.5 million bales of cotton to the world market. Recently the union minister for agriculture, Sharad Pawar, announced that the government would review the 5.5 million bales limit on exports and the nation can then export 7.5 to 8 million bales in the year starting October 1. Union commerce secretary Rahul Khullar also announced that duty-free exports of 5.5 million bales would be allowed.

Pawar and his cotton exporters lobby claims that the export of more cotton to the world market, which is handed by multinational speculative and online traders, will bring better prices to the Indian cotton growers. But in reality the benefit is going go to the big exporters.

Instead of giving a minimum support price of Rs 4,200 per quintal to the domestic growers, as being demanded by them, the government has set the procurement price at only Rs 3,300 per quintal. This is cheapest compared to other countries. China is giving Rs 4,800 per quintal to its growers and Brazil gives Rs 4,900.

Making huge procurements of this ‘cheapest’ cotton, big traders prefer to export more cotton and thus to earn more profit.

As a result, the prices of cotton and yarn in the domestic market have touched unprecedented levels. The domestic price of cotton has increased from Rs 23,000 per candy (356 kg) in April 2010 to Rs 41,000 per candy now. The price of popular varieties of cotton like Shankar-6 now hovers at around Rs 42,000 per candy.

From Rs 120 per kg in August 2009, the warp yarn prices increased by nearly 80 per cent to touch Rs 200 per kg this August. The price of hosiery yarn increased by 40 per cent in one year.

Textiles minister Dayanidhi Maran has failed to effectively intervene on this issue. DMK leader and Tamilnadu chief minister, M Karunanidhi, wrote only a casual letter to the prime minister.

FIGHTBACK

STARTS

So for the textiles manufactures and workers of Tirupur, there was no alterative but to fight in order to protect their industry and livelihood.

A confederation was formed under the initiative of Tirupur Exporters and Manufactures Association (TEAMA). Associations like the Tirupur Industrial Federation, Tirupur Export Knit Printers Association, Tirupur Hosiery Yarn Merchants Association, Coimbatore District Powerloom Cloth Manufacturers Association, Erode Textiles and Garments Exporters Association and the central trade unions like the CITU, AITUC, HMS and INTUC joined it.

Responding to the call of the said confederation, all the micro, small, medium and also big textile companies in western and southern Tamilnadu went on a 48 hour strike. The entire city of Tirupur wore a deserted look. Almost all home textile export units in Karur, Erode, Palladam, Somanur, Avinashi and 2.5 lakh powerlooms across Tamilnadu also joined the strike. Operations in most of the textile firms in the state came to a halt.

The ruling DMK miserably failed in its attempts to disrupt the massive response for the bandh though it did use the Tirupur Exporters Association (TEA), a group of big industrialists, which refused to join the strike.

After this successful protest, TEAMA president M P Muthurathinam said it was high time the cotton prices were brought down. To this end, the government should ban cotton export as well as speculative trading so that the requisite quantity needed for consumption of Indian garment making units become available at lower prices.

He reiterated that banning the cotton exports was not going to affect the livelihood prospects of the growers in any manner, as it is the traders and middlemen and not the growers who benefit from the higher export prices.

Even after giving a minimum support price of Rs 4,200 per quintal to the growers, as they are demanding, as against the present procurement rate of Rs 3,300 per quintal, the spinnable cotton could be distributed at around Rs 27,000 per candy, he pointed out. However, the price now hovers at around Rs 42,000 per candy.

This abnormality in the other-end prices is only because of free-hand cotton exports and online trading, the TEAMA president said.

He suggested that the Cotton Corporation of India should procure the cotton produced by the growers so as to ensure that they get good prices. This will, in turn, ensure that the cotton trade does not remain under the middlemen’s dominance.

Muthurathinam thanked all the constituents of the confederation which had called for a total shutdown in Tirupur and nearby clusters on September 24 and 25 to express the displeasure of the textile industry over the rising prices of cotton. The response was tremendous owing to the sincere participation of the trade unions as well as the textile and trade associations, he said.