Open-End (OE) spinning mills across Tamil Nadu have decided to scale down cotton waste procurement and reduce production by 50 per cent from next week if cotton waste prices are not corrected further, according to the Open-End Spinning Mills Association (OSMA).
Coimbatore: Open-End (OE) spinning mills in Tamil Nadu have decided to curtail cotton waste procurement following a steep rise in prices, a move industry representatives say has severely impacted the operational viability of grey yarn manufacturers across the State.
Open-End Spinning Mills Association (OSMA) president Arulmozhi said more than 250 grey yarn manufacturing OE mills in Tamil Nadu have been affected by the sharp escalation in cotton waste prices over the past few months.
He said the price of Comber Noil, a key raw material used by OE mills, climbed to ₹140 per kg in May, significantly increasing input costs and placing severe financial strain on spinning units.
Arulmozhi pointed out that following the Union government’s decision on May 31 to withdraw the 11 per cent import duty on cotton, cotton prices fell sharply from ₹69,500 per candy (₹195 per kg) to ₹61,500 per candy (₹172 per kg), translating into a reduction of nearly ₹23 per kg.
However, despite the substantial decline in cotton prices, Comber Noil prices have been reduced by only ₹10 to ₹15 per kg. The association argued that cotton waste prices should reflect the broader correction in cotton prices.
“For OE mills to remain viable and competitive, the price of Comber Noil must decline by at least another ₹10 per kg, bringing it down to around ₹110 per kg,” Arulmozhi said.
He noted that the sustained increase in cotton waste prices has affected not only OE spinning mills but also downstream sectors, including textile exporters in Karur and powerloom fabric manufacturers in key textile clusters such as Somanur, Palladam, Avinashi and Erode, all of whom depend heavily on grey OE yarn.
Warning of impending production cuts, the association said that if spinning mills fail to reduce Comber Noil prices by a further ₹10 to ₹15 per kg this week, grey yarn OE mills across Tamil Nadu have collectively resolved to reduce production by 50 per cent from next week.
The association has also decided to seek the intervention of both the State and Central governments to evolve a long-term solution to the recurring issue and safeguard the competitiveness and sustainability of the textile value chain, he added.
Open-End Spinning Mills Association (OSMA) president Arulmozhi said more than 250 grey yarn manufacturing OE mills in Tamil Nadu have been affected by the sharp escalation in cotton waste prices over the past few months.
He said the price of Comber Noil, a key raw material used by OE mills, climbed to ₹140 per kg in May, significantly increasing input costs and placing severe financial strain on spinning units.
Arulmozhi pointed out that following the Union government’s decision on May 31 to withdraw the 11 per cent import duty on cotton, cotton prices fell sharply from ₹69,500 per candy (₹195 per kg) to ₹61,500 per candy (₹172 per kg), translating into a reduction of nearly ₹23 per kg.
However, despite the substantial decline in cotton prices, Comber Noil prices have been reduced by only ₹10 to ₹15 per kg. The association argued that cotton waste prices should reflect the broader correction in cotton prices.
“For OE mills to remain viable and competitive, the price of Comber Noil must decline by at least another ₹10 per kg, bringing it down to around ₹110 per kg,” Arulmozhi said.
He noted that the sustained increase in cotton waste prices has affected not only OE spinning mills but also downstream sectors, including textile exporters in Karur and powerloom fabric manufacturers in key textile clusters such as Somanur, Palladam, Avinashi and Erode, all of whom depend heavily on grey OE yarn.
Warning of impending production cuts, the association said that if spinning mills fail to reduce Comber Noil prices by a further ₹10 to ₹15 per kg this week, grey yarn OE mills across Tamil Nadu have collectively resolved to reduce production by 50 per cent from next week.
The association has also decided to seek the intervention of both the State and Central governments to evolve a long-term solution to the recurring issue and safeguard the competitiveness and sustainability of the textile value chain, he added.