Excess capacity! Spinning mills in northern India to shut down once a week

by Apparel Resources News-Desk

16-July-2019  |  2 mins read

Spinning Mills

Struggling with the excess capacity, spinning mills in northern India are considering cutting back production and shutting down their mills once a week against the current trend of operating a mill 24×7.

According to industry, this ‘extreme step’ has come as a result of excess spinning capacity in the country and poor demand for yarn from overseas markets leading to accumulation of yarn stocks and poor liquidity.

This downward trend might continue for next 3-4 months with slack demand, and market situation will improve as soon as demand and supply balance gets restored.

China, a major importer of Indian yarns for the past few years, has cutdown imports in the past few months, thus worsening the situation, leading to accumulation of yarn stocks in Indian spinning mills.

The spinning industry is under crisis and the situation is moving from bad to worse and spinners are making losses. Industry is therefore considering various options to reduce daily production, including closing the plant for one day in a week or more.

Rajiv Garg, President, Northern India Textiles Mills’ Association (NITMA) and MD, Garg Acrylics Ltd, Ludhiana says, “Some textile units are considering of lowering the capacity to even 50 per cent in the wake of unsafe market situation and to have less borrowing/outstanding and stocks. Weather & quality of inputs also seem unfavourable at present.

Textile industry is also raising fingers on MSP (minimum support price) being approximately 25 per cent more than prevailing global prices.

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