Textile spinning mills in North India, which are currently operating 24×7, are considering cutting back production and shutting down their mills once a week. Excess spinning capacity in the country and poor demand for yarn from overseas markets has led to accumulation of yarn stocks and poor liquidity, Northern India Textile Mills’ Association (NITMA) said.
“China, which has been a major importer of Indian yarns for the past few years, has cut-down imports in the past few months, thus worsening the situation, leading to accumulation of yarn stocks in Indian spinning mills,” NITMA President Rajiv Garg said in a statement.
“The spinning industry is under crisis and the situation is moving from bad to worse and spinners are making losses. Industry is therefore considering various options to reduce daily production, including closing the plant for one day in a week or more.
“Some textile units are considering of lowering the capacity to even 50 per cent in the wake of unsafe market situation and to have less borrowing / outstandings and stocks. Weather and quality of inputs also seem unfavourable at present,” Garg added.
The current minimum support price (MSP) of cotton is approximately 25 per cent above the prevailing global prices, which is also harming the textile industry. NITMA expects the current downward trend to continue for the next 3-4 months. Demand and market situation is likely to improve as soon as demand-supply balance gets restored.