Spinning mills should reduce production for 60 days: ITF

Spinning mills have been advised by the Indian Texpreneurs Federation (ITF) to reduce yarn production by 35 per cent for two months to minimize loss and stabilise cotton and yarn prices. ITF members were issued an advisory recently to reduce production with immediate effect and to avoid buying cotton to minimise the impact of financial loss.

Yarn prices are down due to demand-supply imbalance and the current price disparity of yarn and cotton has resulted in severe losses for standalone spinning mills, ITF secretary Prabhu Dhamodharan said in a press release.

Mills in Tamil Nadu, a big player in textile manufacturing, consume more than 30 per cent of cotton and synthetic fibres and a slowdown in production for the next 60 days will automatically stabilise yarn prices by reducing the yarn market supply , he said.

Reducing cotton consumption will also make cotton prices reduce to a realistic level in the next season, Dhamodaran added.

ITF has also advised the mills to retain the workforce and pay wages even without regular work and engage them in annual maintenance activities and impart new training to improve productivity.

ITF took the decision after a study that found that many industries, including cement, steel and broiler, are optimising their production levels based on market intelligence and minimising the impact of their financials during the demand downtrends.