The textile sector in Gujarat is facing a renewed decline in production after enduring losses caused by soaring cotton prices and sluggish demand last year.
Numerous textile processing plants in the region are presently operating at only 40 percent of their capacity due to a decline in orders, prompting the implementation of two-day output cuts. Similarly, weaving machines are also functioning at reduced levels of efficiency.
Figure: The textile sector in Gujarat is facing a renewed decline in production after enduring losses caused by soaring cotton prices and sluggish demand last year.
Despite spinning mills running at approximately 90 percent of their capacity, stocks are piling up. Experts predict that spinning mills will soon initiate a reduction in production by one day per week.
Jayesh Patel, vice president of Spinners’ Association, Gujarat (SAG) said, “The spinning mills in south India are operating at 60 per cent production capacity and those in the north have also cut down on production. At present, combed yarn costs Rs 260 per kg and the prices are not competitive in the exports market; even the domestic demand is slowing down.”
Cotton is priced at around Rs. 61,000 per candy, but owing to poor demand from the garments sector, the industry is badly hit.
Besides that, Rahul Mehta, chief mentor, Clothing Manufacturers’ Association of India (CMAI) said, “With a delayed summer, the demand for summer collection is comparatively low. Moreover, retailers have a huge chunk of unsold inventory from the winter collection. Due to this, the dealers are facing cashflow issues as a result of which the volume of fresh orders has declined.”
