Andhra Pradesh spinning mills staring at crisis.

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Faces problems due to decline in exports and rising costs

The textile industry, fuelling growth in the State besides providing direct employment to thousands of semi-skilled workers, is now staring at a crisis after the spinning mills have declared a production holiday beginning on July 22. The spinning mills decision to cut down on the number of working days comes in the backdrop of a decline in exports and rising production costs.

There are over 120 spinning mills in the State and many are cutting down their production of yarn. Indian yarn is known around the world for its fine quality and is preferred by European and American retailers. The US-China trade war has come in the way of export of Indian yarn and with the USA placing curbs on production in China, domestic spinning mills have started to feel the pinch.

Declining exports to China.

“China has been a major importer of cotton for several years but during the last two years, China has been gradually lowering its exports from India. Domestic demand has also slackened due to stiff competition. Moreover, the cost of production is also going up and we have no other option except to reduce the production,” said chairman of AP Spinning Mills Association, Lanka Raghurami Reddy.

MSP and Power subsidy issues:

Yet another factor weighing in the minds of millers is the increase of Minimum Support Price offered to farmers.

The Union government has raised the MSP by 25% to bail out cotton farmers and as a result, millers are forced to buy cotton at a much higher rate. Even the prices of candy have gone up by 25% with each candy fetching Rs. 43,000.

Finally, the delay in the release of power subsidies to the tune of Rs. 1,200 crore has forced the millers to shut down the mills. The millers hope that the new government in the State would bail them out by releasing the power subsidies immediately.