COIMBATORE: The production in over 250 open-end (OE) spinning mills in Tamil Nadu have been hit with the hike in the price of waste cotton from Rs 105 per kilogram to Rs 128/kg in just two months.
The mills produce grey cotton yarn from waste cotton sourced from spinning mills. These yarns are supplied to power looms in Somanur in Coimbatore district as well as Palladam, Avinashi, Mangalam in the Tiruppur and Erode regions, where they are woven into grey fabric and sold in the northern states.
Two months ago, spinning mills sold comber noil waste cotton at Rs 105/kg. However, they have now raised the price to Rs 128/kg. This sharp increase has severely affected OE mills and powerloom weavers.
(Comber noil is a high-quality, short-fibre byproduct from the cotton yarn spinning process.)
"Despite cotton price dropping to Rs 1,600/candy last week, the decision of spinning mills to hike waste cotton price has impacted all players in the textile value chain. In response to the waste cotton price rise, OE mills have increased prices: 20s weft yarn from Rs 137/kg to Rs 152/kg, and 20s warp yarn from Rs 158/kg to Rs 168/kg. As a result, OE mills are operating at significant losses," said G Arulmozhi, president of Open-End Spinning Mills Association (OSMA).
He demanded the managements of spinning mills to reduce cotton waste price by Rs 20/kg to enable smooth operations across the textile chain.
"Additionally, the practice of levying a packing charge of Rs 1/kg on waste cotton by Tamil Nadu-based spinning mills is unique in India - other states do not follow this. The latter also don't impose packing charges on raw materials like cotton, polyester, or viscose. Tamil Nadu spinning mills should sell waste cotton without packing charges in the future," he added.
M Jayabal, president of Recycle Textile Federation, said, "In November after cotton price declined to 51,000 per candy, the prices of cotton waste, instead of being cut, were steadily increased from Rs 107 to Rs 115 and now to Rs 123-128 per kg, especially for comber waste. This continuous escalation, despite comparatively moderate cotton prices, has placed severe financial strain on OE mills, making it increasingly difficult to sustain operations.
"During the Diwali period, OE yarn prices were around Rs 165 per kg for 20s warp and Rs 148-150 per kg for weft yarn. At present, despite an increase of Rs 23 per kg in waste cotton price, mills are compelled to sell warp yarn below Rs 165 and weft yarn below Rs 155 per kg. The increase in raw material cost has not been matched by a corresponding increase in yarn prices. As a result, yarn is being sold below production cost, and for the past three months, OE mills have been unable to arrest or recover mounting losses," he added.
He urged the Central and State governments to direct and monitor spinning mills to sell cotton waste through a transparent tender system, similar to the system followed by the Cotton Corporation of India (CCI) for cotton sales.