India – Textile mills cut down yarn production due to weak cotton prices

In Tamil Nadu, most of textile mills have cut down yarn production by 30-40% due to drop in cotton prices and the cotton prices was in the range of Rs. 50,000 per candy.

As the end-season prices almost reaching Rs 50,000, there was no point in continuing normal production, as the prices of yarn were not matching the higher cost of production, putting the mills into heavy loss, industry sources said.

The yarn prices were bound to increase, as a result of the shortage by cutting down production and almost 60 to 65 per cent of textile mills resorted to down their production, either by giving one or two weekly offs or reducing the shifts, they said.

Moreover, the new crop of cotton of the season (October-September) was expected to arrive only in the month of November and the mills did not not want to exhaust their available cotton stocks by converting into yarn, which was not not remunerative, they said.

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