Spinning mills to continue with production cut

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Namrata Kath Hazarika | 01 Jun, 2011
The Confederation of Indian Textile Industry (CITI) Tuesday said that spinning mills all over the country will continue with the one-third production cut, which was started on May 24 initially for a week, till the demand conditions improve.

In a press statement, CITI Chairman Shishir Jaipuria said that spinning mills will cut production ranging from 33 per cent to 40 per cent, depending on the stock position in the respective mills, from June 1 until the situation improves.

He added that one-day closure of textile mills on May 23 and one-third production cut initially for one week under the CITI and several associations of mills had resulted in a loss of Rs. 600 crore.

The spinning sector has been demanding government action to check falling prices of cotton yarn both in the domestic and the international markets.

Jaipuria added that mills that are producing man-made-fibre are also facing low demand and declining price and a crisis situation is developing in this sector as well. The unsold stocks have now started piling up with fabrics producers and are faced with cash losses and production cuts, he added.

In fact, the crisis extends to all spinning mills in the country where there are unsold stocks of cotton yarn and high cost cotton had been leading to cash losses for most of the mills, he said.

"It (production cut) has helped in drawing the attention of the nation to the serious problems of the cotton textile sector and also in reducing stocks of cotton yarn with the mills," the CITI chief said.