Some 2000 power looms in Erode, Tamil Nadu, have shut down because of the decline in yarn prices. Most power loom owners had got a good number of orders from textile merchants when yarn price was Rs 215 a kg. But for the past week the price has decreased and is selling at Rs180 a kg.
Many power loom owners had procured a huge quantity of cloth, but those who gave orders are now demanding that the price be reduced by Rs 3 a meter, which is impossible as production costs are high.
The new cotton crop is expected to arrive for sale in December at Rs 40,000 a bale. Today it is available at Rs 46,000 to Rs 48,000 a bale. Yarn and cloth producers want steps to be taken to maintain stability of cotton and yarn prices. They want the price to be fixed for a month. If there was poor or high demand the price could be changed after 30 days.
