TNN | Jun 21, 2022,
Ahmedabad: With cotton prices reaching Rs 1.1 lakh per candy (365kg), spinning units are reeling from unprecedented cost pressures. According to estimates released by Spinners Association of Gujarat (SAG), most manufacturers of cotton yarn are forced to shut for at least three days a week due to reduced demand and increase in the prices of yarn.
“With cotton prices going up, the cost of production for cotton yarn has gone up significantly,” said Saurin Parikh, president, SAG. “However, we are unable to pass on the costs to clients as it is becoming unviable for them to absorb the costs in their manufacturing.”
He added: “As a result, the demand has taken a hit. Our order volumes have declined by at least 40-50% because of which the manufacturing capacities are also underutilized.” The high prices of cotton have affected the entire textile value chain.
Industry players said that Indian cotton prices are the highest currently vis-à-vis the prices in other countries and as a result cotton yarn is increasingly being imported from Vietnam to meet the domestic manufacturing needs. “Locally, cotton availability is also an issue and whatever is available comes at a very high price because of which units are operating at lower capacities,” said Ripple Patel, a yarn manufacturer from Rajkot and vice-president, SAG. Patel added: “Spinning units typically stayed shut for three days a year.
However, with less work, we are keeping the units afloat with a four-day week. If we shut completely, we will lose labourers and finding skilled workforce is a challenge.” Industry sources said that some mills have completely halted production. With the prices of cotton going up, spinners are incurring losses to the tune of Rs 35-40 per kg depending on the count produced. Spinners have urged the Union government to abolish the import duty levied on cotton instead of giving only temporary waivers. (Source: timesofindia.indiatimes.com)