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‘Mill sector revival happening, but at snail’s pace’

LN Revathy Coimbatore | Updated on June 18, 2020 Published on June 18, 2020

While there is some improvement in mills’ capacity utilisation in the region, but the recovery pace is “very slow’, say texpreneurs.

“There’s no panic as in the past. The utilisation levels have inched up compared to last month, but recovery, as we perceive is based on the value chain; it would vary from company to company,” said Prabhu Damodharan, Convenor, Indian Texpreneurs Federation (ITF).

“High end brands are facing the heat; there is some reluctance to buy costly stuff. So brands would have to rework their strategy,” he said.

Industry sources said they were not expecting any drastic change even in July, for one, the retail is still closed, garmenting units have been unable to operate in full swing due to paucity of labour, processing units were located in hotspots and there were no buyers for the fabric.

“There is supply chain disruption in processing of yarn, in procuring cloth as these merchants are in Mumbai and Delhi with offices in congested areas. Once activities pick up in the processing hubs such as Surat and Ahmedabad, things will improve” said J Thulasidharan, President, Indian Cotton Federation.

For the present though, it is reliably learnt that some of the mills that had commenced operations after lifting of the lockdown, are now reconsidering their decision and are proposing to operate three days a week.

“Huge pile up of yarn coupled with tight liquidity is forcing the mill sector to go slow,” the ICF President said, before drawing attention to the surge in demand for hosiery yarn

“If the spread of Covid-19 is brought under control, we can expect the situation to bounce back, say around the first week of August. June-July are lean months, so the slackness in the market is not unexpected.”

Cotton prices have fallen drastically, making Indian cotton the cheapest fibre globally. But the mills seem unable to take advantage of it.

Thulasidharan voiced anxiety about the record closing stock of the white fibre this cotton season

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Published on June 18, 2020
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