Spinning mills across the country will shut down for a day on May 23 and cut production of cotton yarn by 33% for a week starting May 24 in a desperate bid to arrest piling inventories and resurrect prices, the confederation of Indian Textile Industry (CITI) said Wednesday.
Cotton yarn inventories have risen to around 500 million kg.
“The total production lost for the one-day strike would be around 10 million kg and then followed by roughly 3.3 million kg every day,” said Shishir Jaipuria, chairman, CITI.
The association is expected to then review the situation in the first week of June.
Over the past month, cotton prices have lost more than 20%.
Yarn prices have shed over 30% in the past two-and-a-half months, Jaipuria said — from Rs270/kg to around Rs195/kg.
The decline in prices has fuelled expectations of a further fall.
“Procurers are procuring yarn only for their immediate requirement as they expect prices to fall further. This has left yarn producers which huge inventories,” said Arun Churiwal, managing director, RSWM Ltd, which has its presence in the denim and yarn segment.
A speculative global market has left the country’s spinning industry in the blue.
“Global raw cotton prices have also fallen. With this, even importers are in a wait-and-watch mode and don’t want to take a position,” said Jaipuria.
Suryalakshmi Cotton Mills, and Suryajoyti Spinning Mills are some other listed players with exposure to this segment.