Textile spinning mills are considering cutting back production and shutting down their mills once a week against the current trend of operating a mill 24x7.

The decision to take this extreme step has come as a result of excess spinning capacity in the country and poor demand for yarn from overseas markets leading to the accumulation of yarn stocks and poor liquidity.

Rajiv Garg, president, Northern Indian Textile Mills’ Association (NITMA) in a press release said: “China, which has been a major importer of Indian yarns for the past few years, has cut down imports in the past few months, thus worsening the situation, leading to the accumulation of yarn stocks in Indian spinning mills.”

The spinning industry is under crisis and the situation is moving from bad to worse and spinners are making losses. The industry is therefore considering various options to reduce daily production, including closing the plant for one day in a week or more, the release said.

Additionally, to add to the woes of the textile mills, pending cases under Revised Restructured Technology Upgradation Fund Scheme (RR-TUFS) as on November 30, 2018, as per www.txcindia.gov.in, total 6,334 UIDs have been issued having total project cost of Rs30, 274.33 crore and subsidy requirement of Rs3,917.01 crore.

Some textile units are considering of lowering the capacity to even 50 per cent in the wake of unsafe market situation and to have less borrowing/ outstanding and stocks. Weather and quality of inputs also seem unfavorable at present, said Garg.

Textile industry is also raising fingers on MSP being above global prices at present. This downward trend might continue for the next 3-4 months with slack demand and market situation will improve as soon as the demand and supply balance gets restored, feels NITMA.

Published On : 16-07-2019

Source : Tribune India