Spinning mills across India begin to cut cotton yarn production

According to industry sources, the spinning mills are worried about lower arrival of cotton in the months to come. They are also facing muted demand from weaving industry due to poor lifting of fabrics from garment industry. The mills are intimating their decision of production cut to their dealers and sales partners. In some regions, mills are also announcing their decision of production cut through their respective industry bodies.

Recently north India’s Nahar group informed dealers and business partners about the decision to cut production. The company has decided to observe one day holiday in plants on weekly basis. Other spinning mills in north India are also adopting same route to cut their production. It is pertinent to mention that north India houses many large sized spinning mills that produce cotton and other yarn.

An industry source from Ahmedabad told Fibre2Fashion that it’s high time for spinning mills to balance production with the supplies of cotton, demand from downstream industry and price dynamics. Gujarat-based spinning mills have this month reduced cotton yarn production by up to 20 per cent. However, sources said that a collective decision was not taken to cut production and it is being decided by individual mill. Few mills may decide to cut production immediately by announcing holiday on one or two days a week. Other mills may continue normal production for now and announce production cut at later stage. Sources said that spinning mills in Gujarat are smaller in size, so they have limited capacity to face financial stress. So, it is sure to see production cut, but it may not be uniform.

A source from Tiruppur estimated that cotton yarn production will be cut by at least 10 per cent in Tamil Nadu due to scarcity of cotton. Minimum 50 per cent mills have already cut production. Other mills will also follow same route to manage current tough conditions. It is also likely to see more production cut in the coming months. According to a source, production cut will be intensified in the months to come till arrival of the next crop.

Currently, Indian textile industry is reeling under dual pressure of limited supplies of cotton and muted demand from garment industry. Costlier cotton put pressure on spinning mills, and they are forced to spike price of yarn, which put the weaving industry into trouble. As a result, powerlooms in Maharashtra, which are numbered to around 23 lakhs across Bhiwandi, Malegaon and Solapur, have also been badly affected. They preferred to cut fabric production partially.

In fact, the production cut began in Maharashtra in last January-February when yarn prices skyrocketed. Thousands of texturisers, hosiery units and dyestuff manufacturers across the country are being forced to cut their operations as output prices in local and export markets are barely in sync with the inflated cost of cotton.

However, the availability may increase from July onward when cotton will arrive in other countries like US, Brazil and China. Sources said that new cotton will arrive in India from July so the industry can expect some relief from current limited arrival of domestic cotton. The prices are also likely to see downward trend when cotton import will increase in India. Indian textile industry is trying hard to convince the central government to remove import duty.

Fibre2Fashion News Desk (KUL)