A fall in global yarn prices and a glut in the international market have hit Indian textile mills and exporters hard. Yarn prices have declined around 30 per cent this year. The recent devaluation of the yuan against the dollar by China has also affected the spinning and textile industry in India.
A few players are looking for restructuring of their debt. Stocks of finished goods at mills have increased as buyers have refused to lift the stock because of the decline in prices. The price of yarn is down by Rs 10 on a month-on-month basis and by Rs 30 a kg compared with the corresponding period last year. The price of fine yarn (above 30 counts) is now Rs 156 against Rs 176 last year. The two-count yarn is now around Rs 136. The price reduction has eroded margins for the industry and affected their turnovers.
About 40 to 50 per cent of India’s textile production is exported and China is one of its big markets. But China is striving to push exports by making the pricing of its products attractive in global markets. With more stocks in the hands of Indian mills, prices have fallen in the absence of corrective measures.
