Textile mills to reduce yarn prices by Rs 5/kg .

Spinning mills, owing allegiance to the Souther India Mills Association (SIMA) have agreed to reduce the prices of hosiery yarn by Rs 5 a kg from May 1.

The decision, however, did not make the Tirupur knitwear cluster happy since the latter has sought a Rs 10/kg cut in the prices of cotton yarn.

While half-heartedly welcoming SIMA's decision, Mr A. Sakthivel, President, Tirupur Exporters' Association, said the reduction is insufficient, considering the level of hike in yarn price.

SIMA should, therefore, consider reducing it by another Rs 5/kg, he said.

SIMA has appealed to the Union Textiles Minister, Mr Dayanidhi Maran, to drop the proposal of withdrawing the duty drawback for cotton yarn.

“The Government has already withdrawn the DEPB benefit of 7.67 per cent. Removal of drawback would make the Indian yarn expensive in the international market,” Mr J. Thulasidharan, President of SIMA, said.

He further said any negative measures such as levy of export duty on cotton yarn or any other control on yarn exports would become counter productive and ghastly for the spinning sector.

“The spinning sector is already saddled with huge accumulation of EPCG and advance licensing export obligations,” he added.

Mr Thulasidharan also appealed to the member-mills to extend support to downstream sectors.

The warp yarn prices and hank yarn prices had already started declining, he said.

Source : Business Line