INDIA’S YARN OUTPUT CUT WILL NOT HURT EXPORTS

By P.Vijian

NEW DELHI, May 25 (Bernama) -- Indian yarn exports will not be affected
despite spinning mills cutting production to prop up price and demand, after
facing sluggish business recently.

Indian spinning mills went on a nationwide protest last Monday and decided
to cut production to one-third of their daily output for a week -- a sign of
protest after the government withdrew incentives.

"This is only a temporary cutback. Once demand and supply finds its
equilibrium, it will bounce back. Exports won't be affected," Siddhartha
Rajagopal, executive director of the Cotton Textile Export Promotion Council
told Bernama.

Malaysia is a regular importer of a variety of Indian cotton yarn, with last
year's procurement worth nearly US$53 million (RM159 million), according to
the Council.

India's RM50 billion cotton spinning industry with 3,000 mills, mostly
rural based and which employs over 40 million spindles, is in a dilemma with
excess stock, poor demand and low prices.

"Right now the industry is in deep trouble because it is left with huge
stocks and no buyers. Cotton textile and garment producers do not want
to take the risk to buy, fearing the price may drop further," added Southern
India Mills Association secretary-general, Dr K. Selvaraju.

The mills are grappling with nearly 500 million kilograms of surplus yarn,
after the government imposed a temporary ban on exports. The ban was lifted last
month.

India exports yarn worth US$3 billion (RM9 billion) annually, making it
world's largest exporter and controls 25 percent of the global market.