Around 250 open end (OE) spinning mills in Tamil Nadu have warned of cutting down production by 50% next week if cotton waste prices are not reduced further.
“OE mills have been affected by the abnormal increase in cotton waste prices over the past few months, which has eroded profitability,” G. Arulmozhi, President of Open-End Spinning Mills Association (OSMA) said.
G. Arulmozhi pointed out that after the centre removed the 11% import duty on cotton on May 31, due to which cotton prices fell significantly or by about Rs 23 per kg.
“However, despite the sharp fall in cotton prices, spinning mills have reduced comber noil prices by only ₹10-15 per kg. We are demanding a further reduction,” he stated.
“For OE mills to remain viable and competitive, cotton waste prices must reflect the decline in cotton prices. The current pricing structure is unsustainable for the sector,” Arulmozhi added.
“OSMA said that if prices are not reduced during the current week, all grey yarn OE mills have collectively decided to cut production by 50% from next week,” the Hindu reported.
More than 100 vendors across India who supply cotton waste and other raw materials to these mills, either directly or through spinning mills will also be affected if production is cut.
Image courtesy: DWIJ
