India: India’s RM50-billion cotton spinning industry with 3,000 mills, mostly rural based and which employs over 40 million spindles, is in a dilemma with excess stock, poor demand and low prices.
Indian spinning mills went on a nationwide protest last Monday and decided to cut production to one-third of their daily output for a week — a sign of protest after the government withdrew incentives.
“This is only a temporary cutback. Once demand and supply finds its equilibrium, it will bounce back.
“Exports won’t be affected,” Siddhartha Rajagopal, executive director of the Cotton Textile Export Promotion Council told Bernama.
Malaysia was a regular importer of a variety of Indian cotton yarn, with last year’s procurement worth nearly US$53 million (RM159 million), according to the council.
India’s RM50-billion cotton spinning industry with 3,000 mills, mostly rural based and which employed over 40 million spindles, was in a dilemma with excess stock, poor demand and low prices.
“Right now the industry is in deep trouble because it is left with huge stocks and no buyers.
“Cotton textile and garment producers do not want to take the risk to buy, fearing the price may drop further,” added Southern India Mills Association secretary-general, Dr K Selvaraju.
The mills were grappling with nearly 500 million kilogrammes of surplus yarn, after the government imposed a temporary ban on exports.
The ban was lifted last month.
India exports yarn worth US$3 billion (RM9 billion) annually, making it world’s largest exporter and controls 25 percent of the global market.