Tamil Nadu OE Mills Warn Of 50% Production Cut Over Cotton Waste Prices
More than 250 open-end (OE) spinning mills in Tamil Nadu have warned that they will reduce production by 50 per cent from next week if cotton waste prices are not brought down further, raising concerns over disruptions in the supply of grey yarn to downstream textile sectors.
The warning comes from the Open-End Spinning Mills Association (OSMA), which says the sharp rise in cotton waste prices over recent months has severely impacted the viability of OE spinning operations. Cotton waste, particularly Comber Noil, is the primary raw material used in the production of open-end yarn.
According to OSMA President G. Arulmozhi, OE mills have been struggling with rising input costs despite a significant decline in cotton prices following the Centre’s decision to remove the 11 percent import duty on cotton on May 31. Cotton prices have since fallen from around Rs 195 per kg to Rs 172 per kg, but cotton waste prices have not corrected proportionately.
While spinning mills have reduced Comber Noil prices by only Rs 10-15 per kg, OE manufacturers argue that a steeper reduction is necessary to reflect the fall in cotton prices and restore profitability.
The proposed production cut could impact not only the 250 grey yarn-producing OE mills but also around 350 other OE units that use garment cutting waste and recycled polyester fibre sourced from PET bottles. The sector supports an extensive supply chain involving more than 100 raw material vendors across the country.
Grey OE yarn is a key input for textile clusters in Karur, Somanur, Palladam, Avinashi and Erode, where it is used in the manufacture of products such as towels, bed linen, denim, T-shirts, socks, lungies, floor mats and other home textile items. Many of these products cater to value-conscious consumers in both domestic and export markets.
OSMA has also decided to seek intervention from the State and Central governments to address recurring volatility in cotton waste prices and develop a long-term mechanism to ensure raw material price stability for the sector.
Industry observers warn that any prolonged production cuts could disrupt yarn supplies and increase cost pressures across several textile value chains in southern India.
