Spinning mills set to close from today

Guntur: In a move that could result in serious repercussions, the AP Textile Mills Association decided on Monday to close all the 135 spinning mills across the State with effect from Tuesday, due to a severe crisis in the industry.

Earlier, the spinning mills used to export 25 per cent of cotton yarn production to China, which in turn exports it to America. Following strained relations between America and China, the latter stopped exporting cotton yarn to USA. As a result, China stopped importing cotton yarn from India.

However, due to the failure of cotton crop during the last season all over the country, the demand for quality cotton has increased manifold across the country, which led to increase in cotton price. At one point of time, the price of 365 kg cotton candy touched Rs 1.12 lakh, which was sold at Rs 50,000 earlier.

At present, the cotton candy is being sold at Rs 60,000.

However, the price of cotton yarn has not increased proportionally in the international market. Due to the diminishing demand in the international market, there are no cotton yarn exports from the country. As a result, the spinning mills suffered heavy loss and reduced cotton yarn production. At present, cotton stocks worth Rs 500 crore remained in the godowns of the spinning mills.

There are 135 spinning mills generating employment to 1.25 lakh workers. Earlier, spinning mills had worked in three shifts, but now they are working in one or two shifts due to crisis in the market. In addition to this, the government had not released incentives and subsidies worth Rs 1,400 crore to the spinning mills.

Speaking to The Hans India, AP Textile Mills Association president Lanka Raghurami Reddy demanded the government to release Rs 1,400 crore incentives and subsidies immediately. "We have decided to close the mills for 15 days from Tuesday across the State. We have no option except to close the mills," he added.