Business

Yarn Spinners From Andhra Pradesh Declare Production Holiday To Curb Losses

Cotton prices have skyrocketed in last two months while the yarn price remained unmoved and incurring huge losses to spinners. Reacting to the situation, Andhra Pradesh Spinning Mills Association (APSMA) has decided to observe a full day production holiday on every Wednesday of the week. The 120 member strong association while announcing the decision has also urged the government to undertake a slew of measures to save the spinning industry. Cotton prices off late has increased from Rs. 35000 a candy (355.6kg) to Rs.48000 and racing towards Rs.50000 mark. But the yarn price has not increased to commensurate with the increased fiber price in domestic or international markets.

Because of this disparity in yarn production cost and market price the industry is losing Rs. 25 - 30 per Kg yarn and the spinning industry is not in a position to bear such huge losses. P. Dharma Teja, Chairman, APSMA, said “Some of the multinational and local trading companies have resorted to hoard the cotton and selling the same at a 55% higher price. Another reason for this sudden and unusual increase of cotton price is due to allowing of multinational and local trading companies by Cotton Corporation of India (CCI) to participate in their daily cotton auction along with the spinning industry.”

Dharma Teja urged the government to pickup urgent action on these issues to curb price increase and save the industry as well as thousands of jobs. He indicated that is the cotton prices continue to remain high, the member mills have decided to increase the production holiday to 2 - 3 days per week in the coming weeks.

On behalf of the A.P spinning industry, Dharma Teja also urged for immediate measures to release of Rs 272 crores subsidy which was already sanctioned in the first quarter of 2016-17 and also to provide budgetary sanction for the balance/pending subsidy amounts of Rs.1000 crores before a complete collapse of the existing agro based spinning industry.

He further pointed out to the measures taken by neighboring states like Telangana & Maharashtra to save the spinning industry. Both the states have decided a direct reduction in the tariff by Rs. 2 per unit of electricity consumption with immediate effect according to Dharma Teja.