More than 250 grey yarn manufacturing open-end (OE) spinning mills across Tamil Nadu have warned of a 50% reduction in production from next week if cotton waste prices are not reduced further, according to the Open-End Spinning Mills Association (OSMA). The threat comes after a sustained spike in cotton waste prices that has eroded profitability for mills relying on Comber Noil as their primary raw material.
The Price Disconnect
G. Arulmozhi, President of OSMA, explained that OE mills have been hit by an abnormal increase in cotton waste prices over the past few months. During May, prices of Comber Noil — a key cotton waste raw material — surged from the ₹150–160 per kg range to ₹185–200 per kg, placing immense financial pressure on manufacturers.
On May 31, the Centre removed the 11% import duty on cotton, causing cotton prices to fall significantly from about ₹195 per kg to ₹172 per kg — a decline of nearly ₹23 per kg. However, spinning mills have reduced Comber Noil prices by only ₹10–15 per kg, a fraction of the cotton price drop. OE mills are demanding a further reduction to restore viability.
“For OE mills to remain viable and competitive, cotton waste prices must reflect the decline in cotton prices. The current pricing structure is unsustainable for the sector,” said Arulmozhi.
OSMA stated that if prices are not reduced during the current week, all grey yarn OE mills have collectively decided to cut production by 50% from next week.
| Raw Material | Price Before May | Price After Duty Removal (₹/kg) | Change (₹/kg) |
|---|---|---|---|
| Cotton | ₹195 | ₹172 | -23 |
| Comber Noil | ₹150–160 | ₹140–145 (reduced by ₹10–15) | -10 to -15 |
Impact on the Supply Chain
The issue extends beyond the 250 grey yarn-producing OE mills. OSMA noted that approximately 350 other OE mills — which consume pre-consumer garment cutting waste and polyester fibre derived from recycled PET bottles — are also affected. More than 100 vendors across India supply cotton waste and other raw materials to these mills, either directly or through spinning mills.
Grey OE yarn produced by these mills is widely used by exporters in Karur and by powerloom manufacturers in textile hubs such as Somanur, Palladam, Avinashi and Erode. The yarn is converted into a range of products including towels, lungies, jeans, bedspreads, nighties, petticoats, T‑shirts, socks, kitchen linen, floor mats and cleaning mops. Many of these products cater to price-sensitive consumers and lower-income households in both domestic and export markets.
Government Intervention Sought
The association has resolved to seek the intervention of both the State and Central governments to evolve a long-term solution to the recurring volatility in cotton waste prices. The production cut — if implemented — could disrupt supply chains for downstream textile manufacturers and exporters, potentially affecting shipments and employment in the region.
With over 600 OE mills and a vast network of vendors and downstream users, the decision to cut output by half marks one of the most significant production curtailments in Tamil Nadu's textile sector in recent years. The coming days will determine whether price adjustments can avert the cut and stabilise the segment.
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