Jayesh Chouhan, Tue Dec 30,
Yarn Rates Rise in Tamil Nadu After Open-End Mills Shut Down
COIMBATORE: The price of yarn supplied by open-end (OE) mills to powerlooms has risen by Rs 5 per kilogram due to their halt in production for the last week, resulting in continuous demand.
The yarn price has increased to Rs 142 from Rs 137 per kg in the last week. However, OE mills have stopped procuring waste cotton from the spinning mills as its price remains unchanged.
Operators of the OE mills said they have resumed the production with waste cotton in hand and without going for new purchase from the spinning mills.
The OE mills cut production by 50% and some had ceased production fully, claiming they could not operate the mills due to increase in the price of waste cotton procured from the spinning mills by Rs 13 per kg in the last three months.
About 600 OE mills in Coimbatore, Tiruppur, Erode, Salem, Karur, Madurai and Virudhunagar in Tamil Nadu announced production halt on December 21.
M Jayabal, the president of the Recycle Textile Federation said, "While the spinning mills are escalating the price for the waste cotton irrationally, OE yarn price for the 20s weft yarn type dipped in the last two months by Rs 8 per kg. Due to the production halt and subsequent demand from powerloom, the price has increased by Rs 5 per kg in the last eight days.
Since the yarn price has recovered gradually, OE mills have started operation with the waste cotton in stock." The mills have stopped the purchase of waste cotton from the spinning mills as they have not changed the price, he added.
"Cotton is sold at the rate of Rs 53,000 per candy. Waste cotton price was fixed based on the cotton price for the last 15 years. Considering the present cotton price, the waste cotton should be sold below Rs 97 per kg. However, the spinning mills have increased the price from Rs 100 to Rs 113 per kg (comber noil rose) in a syndicate manner.
When the spinning mills under the National Textile Corporation were in operation, the waste cotton was procured on auction basis by OE mills. Based on the auction price, private spinning mills were supplying at the same price.
After NTC mills ceased their production, spinning mills started fixing prices for waste cotton in a syndicate manner without auction," said G Arulmozhi, the president of the Open-End Mills Association (OSMA).
OE mills could start procuring waste cotton from spinning mills if they reduce the price by at least Rs 5 per kg, he added.