Because the price of yarn does not cover the cost of production, textile mills that spin yarn from waste cotton (comber noil) have reduced production by approximately 40%.
The mills in Tamil Nadu that have the capacity to generate close to 40 lakh kg of yarn per day are currently generating only 24 lakh kg, according to G. Arulmozhi, president of the Open end Spinning Mills’ Association. “We have been having issues for about ten months. However, we were able to keep the mills running. Due to their massive yarn inventories or lack of operating capital, the mills are currently shutting down or reducing their output, he claimed.
Only 50% of the yarn produced is in demand. “In told, yarn was once exported in approximately 6,000 containers. It is barely around 2,000 right now. The leftover yarn is offered for sale on the domestic market. As a result, there is no demand and no market for the pricing, he stated.
Although cotton prices have stabilised, Mr. Arulmozhi claims that the cost of waste cotton is still high. Historically, the cost of cotton waste (comber noil) was equal to 60% of the cost of cotton. However, the spinning mills sell cotton at 85 percent of that price and export leftover cotton as well. Open end spinning mills are unable to afford the high prices for waste cotton.
Furthermore, the July revision to the power rates was made by the Tamil Nadu Generation and Distribution Corporation (Tangedco). Given that many mills are not operating at full capacity, he said, “Tangedco should allow us to pay only for the electricity consumed and should not collect fixed charges.” Bank interest rates also risen from 7.5% to 10.5% during the previous four months. All of these elements raised the price of manufacture. The yarn prices, however, are unprofitable.
The yarn from open end spinning machines is used in around 60% of the made ups created at Karur. The difficulties the open end spinning mills are having also affect the Karur units, he continued.
