Adequate stock in all counts, varieties of cotton yarn: SIMA

While the knitwear and garment exporters in Tirupur have been crying foul over the DGFT's notification on removal of restriction on cotton yarn exports alleging that it could lead to shortage of yarn availability in the domestic market, the spinning sector of the textile industry assert that it has adequate ready stock in all counts and varieties of cotton yarn.

“We can supply any quantity in any count for any segment subject to the commercial terms of the individual mills,” the Southern India Mills Association (SIMA) Secretary General, Dr K. Selvaraju, said.

“Consequent to the closure of the dyeing and bleaching units in Tirupur due to pollution problem, the spinning mills are left with substantial quantity of hosiery yarn in all counts. The question of shortage does not arise. Cotton yarn consumers across the country can approach SIMA for any count and any quantity of cotton yarn,” he said in a release issued here today.

He, however, pointed out that consumers should be prepared to pay the market price and meet the commercial terms of the individual units to ensure smooth and constant supply of yarn. “Our members have proved to be the top ticket mills not only in the domestic market but across the country in meeting customer demands, producing quality yarn at economical rates,” he said.

Hike in rates

On the downstream sectors charge about the unreasonable hike in the cotton yarn rates by the mill sector, the SIMA Secretary General said, “the price of raw cotton has shot up by over 40 per cent within a short period. Shankar 6 for instance, has risen from Rs 44,000/candy in November 2010 to Rs 60,300/candy last month; DCH 32, which was quoting at Rs 52,000/ candy (in November) touched Rs 84,000 in March. Cotton yarn price, on the other hand, has gone up only by 5-10 per cent during this period. The 40s carded yarn cone price has increased from Rs 1,248 (per 5 kg) during November to Rs 1,313 during March 2011, and the 80s combed cone, rose from Rs 2,106 to Rs 2,236 per 5 kg bundle during the same period.

The average price of 40s hosiery yarn increased to Rs 274/ kg from Rs 240/ kg.

‘The spinning mills are incurring cash losses ranging from 3-10 per cent in almost in all counts, as they could not pass on the abnormal increase in raw cotton price, steep increase in power cost (in Tamil Nadu) caused due to acute power shortage and sizable increase in labour cost to the yarn consumers,” he said.

He further said that the predominantly cotton-based Indian textile industry was subjected to severe pressures in the recent past. “Improper planning of raw material security, various inconsistent and lopsided policies has had negative impact on the sector.”

“The challenge that is looming large today is the steep increase in the price of raw cotton, hardening of bank interest from 7.5 per cent to 14 and working capital limitations (three months credit and 25 per cent margin money). Member mills have invested huge sums in upgrading technology,” he added.

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