India's home furnishing hub to further cut recycled yarn production

04 Jul '23

2 min read

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Due to a third consecutive year of weak demand, Panipat's recycled yarn manufacturers are planning to cut production by 25 per cent.
After a global home textile boom in 2020, demand has declined as normalcy returns and due to impacts of the Russia-Ukraine war.
Prices for recycled yarn have dropped by around 20 per cent, leading mills to decrease shifts.

Panipat's recycled yarn manufacturers are planning to further reduce production due to continued sluggish demand for home textiles. This marks the third consecutive year of slower demand in India's home furnishing sector. Roller spinning production units in northern India are set to close two days each week for one month, effectively cutting production by an estimated 25 per cent. Previously, these mills operated in single shifts due to limited demand.

The year 2020 saw a global boom in home textiles as people purchased more products while confined at home due to extended lockdowns worldwide. Consequently, recycled yarn mills in Panipat and nearby areas expanded their capacity to meet the surging domestic and international demand. However, the easing of the pandemic and a return to normalcy led to a decline in demand for home textiles. The Russia-Ukraine war further disrupted the supply of energy and other essentials, causing a spike in global inflation, particularly in the US and Europe. This prompted consumers to postpone their home textile purchases. The resulting stockpile of home textiles in retail and brand warehouses caused further slowdown in imports, with many retailers and brands halting their home textile purchases and delaying previous orders.

Market estimates suggest that recycled yarn prices have decreased by approximately 20 per cent in the past few months. This has led roller spinning mills to reduce production to a single shift, in addition to observing Sunday as a holiday. The Northern India Roller Spinners Association recently held a meeting in Panipat to address the situation. It has decided to close mills for two days in each week for one month. Later, it will review the situation and take decision.

The newly added capacity by spinners has also created a glut situation in the market. Preetam Singh Sachdeva, president of the Association told Fibre2Fashion, "We have decided to take a full holiday every Friday and Saturday for one month to further reduce production. This decision is expected to reduce production by around 25 per cent."

According to the Association, the home textiles market in Panipat and the surrounding area is estimated a turnover of ₹50,000 crore including exports accounting for around 30 per cent and domestic sales contributing the remaining 70 per cent. Sachdeva noted that recycled yarn production has fallen to just 50 per cent from its peak due to slow demand from both international and domestic markets.

Fibre2Fashion News Desk (KUL)

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