95 pc ginning mills down shutters in Saurashtra

Barring a few exceptions, the nationwide call for two-day shutdown in the ginning mill industry received a good response on Tuesday in Saurashtra — the hub with over 700 ginning mills in the state.

“Nearly 95 per cent of the mills remained closed. Some five per cent remained open to clear the backlog,” said Anand Popat, secretary of Saurashtra Ginners Association.

The ginners’ association had given a nationwide bandh call for two days starting from November 25. The slide in export orders, coupled with a hike in Minimum Support Price (MSP), has hit the industry hard. The decision to sound a shutdown call was taken at a meeting attended by ginners from across the country at Kadi in Mehsana district on November 21.

Against an export of 1.3 crore bales in the last financial year, in the current year the sale has not reached even 1.5 lakh bales. Besides, with Cotton Corporation of India purchasing at the MSP of Rs 575 (per 20 kg) against last year’s price of Rs 407 (a hike of 40 per cent), the ginners say they are left with no option but to down the shutters.

Around 50 per cent of 4,000 ginning mills in India have downed their shutters, said sources. They said even the remaining mills have been observing five-day work weeks.

As an impact of global meltdown, export orders have drastically gone down with cotton prices in the international market having tanked at Rs 22,000 per bale. The main importers like China have heavily cut down on their deals following slump in the global textile market.

However, the cost of production for ginners is around Rs 24,000 per bale when MSP in domestic market is fixed at Rs 475 per 20 kg. Through a 5 per cent draw back system under Duty Entitlement Passbook Scheme (DEPS), the ginners intend to cover this disparity partially.

On an average, a unit in Saurashtra produces 300 to 1, 000 bales per day by running their unit round the clock in three shifts. But due to financial crisis, the production has fallen to about 100 to 200 bales per day.

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