The Indian cotton yarn manufacturing industry is currently going through an extremely difficult period due to the recent abrupt and enormous increase in the domestic cotton prices.
The prices in the domestic market had even surpassed the international prices. The present situation is so severe that many spinning units in Maharashtra and South India have stopped manufacturing temporarily or heavily curtailed production of cotton yarn.
Naveen Rander, COO Sri Bhagirath Textiles Ltd., attributed the current scenario to disproportionate hike in prices of cotton and cotton yarn.
“When the cotton prices were witnessing sharp hikes, yarn prices were not going up proportionally due to which the profit margin of the spinners squeezed. Further, as the cotton prices are now slipping gradually, yarn prices are nosediving,” he said.
Rander also said that the cotton yarn manufacturing industry is likely to face similar challenges for the next two to three months. The situation may improve, he said, only on arrival of new crop.
Another manufacturer who wished not to be quoted, said that the textile industry in general and cotton yarn industry in particular are experiencing the panic state of business.
“The ripples have also been felt by the fabric and garment industry. The availability of good quality cotton is presently a distant dream. Every unit is striving to procure the required quantities of quality cotton,” he added.