Surging yarn prices hit weaving units in Coimbatore

The shortfall in the production of cotton and the steep increase in its demand has resulted in spiralling cotton yarn prices, leaving the cloth manufacturing units in the Coimbatore belt in doldrums.

P Kumarasamy, secretary, Coimbatore district powerloom owners' association told Business Standard that the steep increase in the prices have thrown the cloth production out of gear as the weavers find it difficult to produce fabrics at reasonable prices.

Moreover, they could not draw out their production plans due to the uncertainties on the prices of yarn, which serves as the raw material.

The current cotton season is poised to witness a change in the estimated crop size owing to the adverse climatic conditions prevailing in various parts of country. It was estimated in October that the production of cotton would be around 270 lakh bales this year. However, due to rains, production is now expected to be below 240 lakh bales.

The steep increase in the demand and the non-availability of cotton has resulted in the commodity being quoted at higher prices.

According to a report by the South India Mills Association (SIMA), even the home-grown Suvin DCH 32 cotton is being quoted at Rs 35,500 per candy, a 29.1 per cent increase over January '05.

The yarn rates of lower counts has increased by Rs 35 per kg from the end of last month. The finer count varieties like 60sK and 100sC are ruling at Rs 723 and Rs 1483, registering a 10 per cent and 24 per cent increase over January '05 respectively.

Kumarasamy said that in the prevailing condition, the export deliveries of fabrics were affected and in some instances, the weaving units had to close down their operation. "This will, in turn, lead to a surge in the prices of cloth and bedsheets, for which low count yarn is used," he added.