September 25, 2016
With cotton prices again touching Rs 50,000 per candy (356 kg), the majority of textile mills in Tamil Nadu have cut down yarn production by 30 to 40 per cent, because of non-viability.
At these end-season prices, industry sources pointed out that there was no point in continuing normal production, as the prices of yarn did not match the higher cost of production, pushing mills into heavy loss.
The yarn prices were bound to increase, as a result of the shortage by cutting down production and almost 60 to 65 per cent of textile mills resorted to cut down their production, either by giving one or two weekly offs or reducing work shifts.
Moreover, the new crop of cotton of the season (October-September) was expected to arrive only in November and the mills did not want to exhaust their available cotton stocks by converting it into yarn, which was not remunerative.