Ahmedabad, May 10 (KNN) The textile units in Gujarat are observing two-day production cuts due to low demand and piling up of stock, according to a report in the TOI.

With a reduction in the orders being placed, many textile processing units in the city are running at 40 per cent capacity. Many weaving units in the state are also operating at lower capacity.

Jayesh Patel, vice president of Spinners' Association, Gujarat (SAG) said, "Currently, most spinning mills are running at more than 90 per cent capacity. However, the demand is not strong, and stocks are piling up. We fear that spinning mills will have to stop production for at least a day every week.”

“The spinning mills in south India are operating at 60 per cent production capacity and those in the north have also cut down on production. At present, combed yarn costs Rs 260 per kg and the prices are not competitive in the exports market; even the domestic demand is slowing down,” he said.

The impact of decline in retail demand for apparel is felt on the entire value chain of textile industry.

Rahul Mehta, chief mentor, Clothing Manufacturers' Association of India (CMAI) said, "With a delayed summer, the demand for summer collection is comparatively low. Moreover, retailers have a huge chunk of unsold inventory from the winter collection. Due to this, the dealers are facing cash flow issues as a result of which the volume of fresh orders has declined."

"Overall, in both domestic as well as export markets, the demand has gone down as a result of cautious discretionary spending. This could trigger a reduction in capacity utilization in textile as well as garment making units," he added.

At present, the cotton is priced at around Rs 61,000 per candy, but owing to poor demand from the garments sector, the industry is badly hit.  (KNN Bureau)