Spinning mills in the country will stop production on May 23 as demand and prices of cotton yarn have slumped.

A Confederation of Indian Textile Industry (CITI) release said that a meeting of major textile associations held in New Delhi on Wednesday decided to stop production on May 23. It also decided to effect a 33.33 per cent cutback in daily production from May 24 to boost the demand for cotton yarn.

CITI Chairman Shishir Jaipuria said the government restricted export of cotton yarn to 720 million kg for 2010-11 and there was no cotton yarn export for nearly two months since January 2011. This led to a huge stock of unsold cotton yarn with the mills. When the restrictions for exports were withdrawn from April 1, 2011, the exporters found it difficult to win back overseas buyers. The mills now had a stock of nearly 500 million kg of yarn.

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