Economy

Mixed response to textile body's strike call

L.N. Revathy Coimbatore | Updated on May 24, 2011




There was mixed response from yarn traders to the strike call given by the Confederation of Indian Textile Industry (CITI) to the mill sector to halt production for a day (Monday) and thereafter cut production by 33 per cent until further notice.

While a section of the traders maintained that the situation was ambiguous, a few others perceived that the market had started to react positively soon after CITI's announcement last week.

“The consuming sector was waiting for the prices to touch rock-bottom levels. We perceived the change soon after CITI made the announcement last week.

“The buyers understood that the mill sector, which was already incurring heavy loss due to steep fall in the price of cotton yarn compared to the input cost of cotton and poor offtake would not be able to take any more.

“The cotton prices had started to drop by Rs 22,000 to Rs 25,000 a candy and the yarn rates (across counts) also registered a drop of Rs 25 a kg on an average.

“There was a silver lining to this gloom by way of the fabric adding support,” Mr K.K. Dinesh, a yarn agent in Madurai, told Business Line.

The agent said that he perceived some momentum in yarn movement, as the consuming sector sensed that the prices would not drop below this level.

“There is good cloth support at existing prices and I foresee the market to improve,” Mr Dinesh added.

The Southern India Mills Association Chairman, Mr J. Thulasidharan, also endorsed the yarn traders' perception by stating that the cotton yarn prices had started to stabilise.

“Fabric enquiries are there, cloth movement has started, cotton is firming up and there is an upward trend across all counts of yarn,” he said.

Published on May 24, 2011

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