Textile mills in the state are facing a challenging time due to low demand for yarn in the market. Despite spinning mills running at nearly 90% capacity and cotton prices remaining stable, the demand for yarn is tepid. The situation is worse for small-scale spinning mills, where high power and cotton costs along with a dull market have hit operations hard.

According to K. Selvaraju, secretary general of the Southern India Mills’ Association, indicative data of yarn prices show considerable, but demand has fallen in the last one-and-a-half months.

According to Open end Spinning Mills’ Association, despite slight improvement in demand, prices remain a problem. With textile mills slowing down for the last few months, open end spinners are unable to get waste cotton, and as a result, comber noil prices are higher than last year.

Cotton prices are lower than the last year's price levels but higher than the present international prices. This has made Indian yarn uncompetitive in the international market, and buyers are gravitating towards countries like Vietnam.