The open-end spinning mills in Tamil Nadu are operating at 50% reduced production due to slow demand, increase in costs, and pressure on the price of yarn in the textile industry’s value chain. Open-end mills are incurring losses, as the prices of cotton waste, the primary material used by these mills, have gone up despite a decrease in the prices of cotton and yarn, said G Arulmozhi, president, Open End Spinning Mills Association.
Tamil Nadu’s open-end spinning mills produce 25 lakh kg of grey yarn and 15 lakh kg of colored yarn every day. “This crisis, too, is about the mills being forced to shut down to improve market conditions,” he said. Cotton prices are down from ₹60,000 per candy (356 kg) in October to ₹53,500 in December. “However, prices of cotton waste such as comber noil, which is the short fibers generated as by-product of the cotton combing process in yarn production, increased from ₹100/kg to ₹113. Open-end yarn prices too decreased, with 20s weft from ₹150/kg to ₹140/kg, and 20s warp from ₹165/kg to ₹158,” said Arulmozhi.
Open-end mills are dependent on waste cotton to produce grey yarn, but an increase of ₹15/kg despite a reduction in prices of raw cotton has further flooded the sector with losses. As a result, they have been compelled to either run their units at an operating capacity of 50% or shut them down completely. “The loss of production per day may surpasses ₹10 crore,” he said.
Reduce or eliminate exportations of cotton waste
OSMA insists that the price of cotton waste must be regulated, and the State government needs to cut the rate of electricity. The Central government has to regulate the export of cotton waste. “Reducing the output to 50 percent of the capacity is to prevent further losses until the price of cotton waste and the value of cotton are equal,” said the OSMA president.
Cotton waste comber noil exportations are in massive amounts; therefore, if cotton waste comber noil can be accessible in the local market, then cotton waste comber noil can be used in creating “made-up” articles that would be very beneficial in Karun in the state of Tamil Nadu and Panipat in Haryana. “Instead of exporting a production at ₹100 per kg, we could value-added and export at ₹1,000 per kg and generate more foreign exchange,” pointed out Arulmozhi. Also, these exports have led to a shortage of raw material for open-end mills, according to him.
