As losses continue to mount, following the sharp rise in cotton prices, textile mills in Tamil Nadu (TN) that account for about 46 per cent of the total installed spinning capacity in the country, have reduced their production. According to officials, small and medium textile mills with a capacity of up to 25,000 spindles have reduced their production by about 15-20 per cent since the advent of the month.

Prices of Shankar-6, the most popular cotton variety used by mills in TN, have come up by 42% since April and has currently crossed 49,000 per candy (a candy is 355 kgs). Prices have jumped by about Rs 6,000 per candy in the last ten days alone. Interestingly, mills in the state have started importing cotton as prices are ruling lower in the international market. Since the cost of imported cotton is lower by at least Rs 2,000 per candy, many spinning mills, including smaller ones with a capacity of 10,000 spindles, are importing cotton now.