Cotton price that stood at Rs 52,000 a bale (172 kg) some months back has started declining slowly which is now available at Rs 46,000 to Rs 48,000 a bale. A steep decline in yarn prices is affecting the powerloom sector. About 2,000 of the about 10,000 power looms in Erode and surrounding areas closed down in the last three days, with the danger of many more following suit, according to a senior official of Erode Powerloom Owners Association.

According to N Sivanesan, Chairman, Federation of All Traders and Industries Association, with the new cotton crop arrive for sale in December cotton price is expected to be available at Rs 40,000 a bale. Such a drastic fall in price certainly to affect the yarn and cloth producers,said.

Further due to demonetization, the powerloom owners could not provide full wages to their weavers and others in the industry. Sivanesan wanted the Government to allow powerloom owners to draw sufficient funds from their bank accounts to purchase yarn and also provide wages to their workers.

Association President Subramaniam, as most powerloom owners had got a good number of orders from textile merchants when yarn price was Rs 215 a kg of 40 number count. But for the past one week the price had decreased and was selling at Rs 180 a kg.

Many powerloom owners had procured huge quantity of cloth, but those who gave orders were now demanding that the price be reduced by Rs three a meter, which was impossible as production cost was high.

Under such circumstances it has forced them to close down shutters of 2,000 powerlooms and within a week's time the remaining 8,000 looms will also be closed if the price continues to go down.

He urged the Textile Ministry to take steps to maintain stability of cotton and yarn prices, for which they should instruct to fix a price for one month. But if in case there was poor or high demand the price could be changed after 30 days this would be of great benefit to textile producers.