Several small-scale spinning mills have decided to stop production as cotton prices have crossed ₹1 lakh a candy (356 kg).
South India Spinners’ Association president J. Selvan has said in a press release that cotton prices had increased 53 % between January this year and now, whereas yarn prices were up by only 21 %. The mills were incurring a loss of ₹50 to ₹60 per kg of yarn. Several mills had already reduced the working hours and shifts. They were unable to buy cotton at high prices and face erosion of working capital. Hence, the Association members had decided to stop procurement of cotton and would suspend operations till cotton prices reduced.
Meanwhile, Open end Spinning Mills Association president G. Arulmozhi said in a press release that over 600 open end spinners, employing almost two lakh workers and supplying yarn to weaving units in this region, had decided to switch over to polyester/viscose yarn production from cotton as the raw material prices had seen a sharp hike in prices. The open end spinning mills use waste cotton from the textile mills as raw material. Last month, the price of waste cotton was ₹120 a kg as against ₹155 a kg now.
The textile mills are increasing the waste cotton prices frequently and hence, it is unviable for the open end spinners to continue with waste cotton, he claimed.
President of Cotton Association of India Atul Ganatra said the decision of textile mills to close the units was not a good sign for the entire textile value chain.
