Textile mills here that were reeling under slump in demand and cotton and yarn prices are seeing a revival in demand of yarn and prices have also improved.
Chairman of Southern India Mills' Association S. Dinakaran has said in a release here on Wednesday that the mills had nearly 500 million kg of yarn stock four months ago and had to cut production by 20 per cent to 40 per cent.
Now, with demand reviving in the domestic and international markets for the festival season, the inventory had reached the normal level.
Yarn prices had increased by Rs. 5 a kg in the Salem and Tirupur markets and by Rs. 10 to Rs. 20 a kg in the Mumbai market. In the international market, prices were up in the West Asian and European countries.
Mills that were offering cash discount and bulk discount had stopped the offers and prices were expected to go up by another Rs. 5 a kg, he said. “The current market scenario is very much encouraging for the spinners,” he said.
The market was expected to be normal by next month. Since the new cotton season would commence in October, the Government should ensure that the mills were able to have adequate financial support to purchase quality cotton.
The Government should also convert working capital eroded into a working capital loan with two year moratorium period for repayment of the loan and interest.
The industry would be able to revive faster if the Government extended relief measures.
New cotton season will commence in October; Government told to extend relief measures