Indian Texpreneurs Federation (ITF) today advised spinning member mills to reduce yarn production by 35 per cent for two months to reduce loss and also to bring balance in cotton and yarn prices. In an advisory to the members, ITF said it was advisable to reduce the production with immediate effect for next 30 to 60 days and also try to avoid buying cotton at the prices to minimise the impact of financial loss, due to slowdown in exports and also n domestic market.
Due to demand and supply imbalance, yarn prices were down and with current cotton and yarn prices, standalone spinning mills were facing severe losses due to disparity in prices, as many varieties of yarn were now selling much below the level of manufacturing cost, ITF secretary, Prabhu Dhamodharan said.
Being a big state and big player in textile manufacturing, Tamil Nadu mills consume more than 30 per cent of cotton and similar level in synthetic fibres to produce various types of yarn,he said,adding that if there was a slowdown in production for the next 60 days, “automatically we can bring stability in yarn prices by way of reducing the supply to the yarn market”.
And by way of reducing cotton consumption, cotton prices also will come down to a realistic level in the coming season, he pointed out.
Since weaving, processing, apparel and home textiles were optimising utilisation levels based on demand and supply and order trends, the spinning sector, irrespective of market conditions, used to follow the model of running throughout the year and facing huge losses due to disparity in raw materials and selling prices of yarn, he said.