High Cotton Prices Lead to 50% Production Halt in Tamil Nadu's Grey Fabric Industry
The surge in cotton prices has compelled grey fabric manufacturers in Tamil Nadu to curtail production by up to 50% starting Friday. In the initial week of February 2024, cotton prices ranged from Rs 58,000 to Rs 59,000 per candy, witnessing a notable escalation to Rs 62,000 by March 8.
K Sakthivel, coordinator of the Tamil Nadu Textile Manufacturers Association, expressed concern about escalating losses over the past two years in the textile and power loom sectors, which are vital employment providers in Palladam. Disappointed by the lack of anticipated orders during the Deepavali season, fabric producers noted a substantial rise in yarn costs from Rs 15 to Rs 25 per kg due to the recent surge in cotton prices. The textile industry is grappling with challenges from increased power tariffs, exacerbating the impact of the elevated cotton and yarn prices. Over 300 large textile manufacturers have opted to reduce production by 50% in an effort to enhance survival prospects.
A C Eswaran, president of the South India Hosiery Manufacturers Association (SIHMA), outlined the market dynamics, stating that in normal circumstances, cotton bale prices range from Rs 55,000 to Rs 57,000 per candy. However, during the current season, the cotton market received 215 lakh bales, with 90 lakh bales being acquired by the Cotton Corporation of India (CCI) and cotton traders. Eswaran anticipates government intervention to stabilize prices, considering the current demand for the ready-made garment industry is 300 lakh bales.
The textile department has acknowledged representations from trade bodies and some have already approached the Union Ministry to address the issue. While market conditions remain volatile due to a limited arrival of cotton in the market, officials believe that stabilization may occur in the future.
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