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SIMA says bad days are over for the spinning sector

The textile spinning sector, which is showing signs of growth, perceives that any announcement regarding extension of export benefit for cotton and yarn would definitely lift the sector out of its present paradox. M Senthil Kumar, Chairman, Southern India Mills Association (SIMA) feels, “bad days are over for the spinning sector,”. The domestic market for yarn is better than exports but then unless the government extends export benefit for cotton yarn under MIES and 3 per cent interest subvention, exports will not pick up. He urged that the Yarn Forward Rule under TPP (Trans Pacific Partnership) should also be pushed.

The SIMA chief made a comparison of the mid-month yarn price movement over the last two years to substantiate his observation on the cotton yarn market. 40s K Hank and 40s K Cone were quoting Rs 231/kg and Rs189/kg respectively around mid-October 2014; the rates slipped during the following months to Rs 229/kg and Rs 173/kg before showing signs of pick up around mid-May 2015, but the rate rally did not sustain for even one month. The rates dropped below October 2014 levels in the months that followed and mills carried huge inventory.

Cotton prices too have started to rise in the last one month. Shankar 6, which was quoting at Rs 32,800 a candy around mid-March 2016, has at present risen to Rs 34,100/ candy and DCH 32 to Rs 49,600/candy from a month ago rate of Rs 48,400/candy.

Meanwhile, industry has now begun to voice its apprehension over China’s decision on off loading of cotton.