Tamil Nadu textile spinning mills producing blended yarn by using synthetic material, have decided to stop production during the weekends with immediate effect as losses mounting following sharp decline in demand for synthetic yarn due to unknown reasons for the last few months.
A decision to this effect was taken at a meeting of managing directors of nearly 90 mills producing such yarns, under Indian Texpreneurs Federation (ITF), for taking corrective measures to control the crisis. The meeting also decided to create a scientific data base and marketing intelligence to provide the trend to the mills.
Naresh Devaraj, coordinator, Indian Texpreneurs’ Federation (ITF), Synthetic Spinners’ Group said that there has been a huge fall in yarn prices in the past few months due to poor demand. They are incurring losses of Rs 15-20 per kg (for yarn).
Their immediate aim is to reduce the losses, the stoppage of production during the weekends would result in a 25 to 30 per cent reduction in output, which mills hope would be able to reverse the continuing fall in prices.
Prices of 56’s count polyester cotton yarn, which was ruling at Rs 190 per kg (ex-mill), is now quoting at around Rs 158 per kg. Mills in the state account for nearly 90 per cent of the supply of fine count yarn to upcountry markets, ITF officials said. Spinning mills, which usually have 7-20 days production as stock, have seen it increase to 40-60 days following the poor off-take of yarn.
D Prabhu, secretary, Texpreneurs Forum said that a committee has been formed to analyze the sudden decline and also to review the impact of cut in production.
