Low demand in the market for yarn has hit the textile mills in the State.
According to K. Selvaraju, secretary general of the Southern India Mills’ Association, indicative data of yarn prices available show that hosiery yarn that was selling at ₹381 a kg in October last year is ₹331 a kg now and price for warp variety that was ₹303 a kg in October is ₹270 a kg at present. The weaving units were doing well even a few days ago. But, the demand fell in the last one-and-a-half months. Though the spinning mills are running at nearly 90% capacity and cotton prices are stable, the demand for yarn is tepid.
For the small-scale spinning mills, high power costs, high cotton costs and dull market have hit operations. “We are unable to trigger demand in the market,” said a small-scale textile mill owner.
Open end Spinning Mills’ Association president G. Arulmozhi says yarn demand has seen slight improvement. But prices are a problem. With textile mills slowing down for the last few months, the open end spinners are unable to get waste cotton and hence, comber noil prices are higher than last year. Production cost has gone up by ₹7 a kg in the last 12 months because of higher labour and power costs and raw material cost is also high. But, yarn prices improved only by ₹10- ₹15 a kg in one year.
Nishant Asher, secretary of Indian Cotton Federation, added that Indian cotton prices were hovering between ₹61,000 and ₹62,000 a candy and though it was lower than last year price levels, it was higher than the present international prices. This had made Indian yarn uncompetitive in the international market and buyers were gravitating towards countries such as Vietnam.