South Indian cotton spinning mills went on a one-day strike on Monday to protest declining prices of cotton yarn and pile up of inventories, but the protest was criticised by downstream apparel associations.

J Thulasidharan, chairman of the Southern India Mills Association (SIMA) spearheading the strike said there was a production loss of 18 lakh kg of yarn on Monday. The total national production is about 120 lakh kg per day. To intensify the stir the umbrella organisation of the spinners, the Confederation of Indian Textile Industry (CITI) has decided to cut back production by one -third from Tuesday onwards to make the government rescind the ban on export of yarn. Shishir Jaipuria, chairman, CITI had said that short-sighted government policies with reference to both cotton and cotton yarn in the recent past have converted a profitable spinning industry into a crisis ridden sector during the last few weeks.

But the apparel associations in the country have taken objections and have said the spinners were making unfounded and baseless allegations. According to a joint statement issue by Apparel Export Promotion Council, Clothing Manufacturers Association of India and Tirupur Exporters Association, the entire apparel and value-add industry has instead “appreciated the textile ministry's and the UPA governments strong resolve to protect domestic consumers and domestic jobs by ensuring availability of raw materials, such as cotton and cotton yarn in sufficient quantity for home consumption”. According to them the main reason for declining prices and demand for yarns was the unprecedented hike by 100 % to 150% in yarn prices and corresponding increase in fabric prices in a one year period. The prices went up astronomically, not due to a major increase in demand, but due to speculation and hoarding in both cotton, cotton yarns. The apparel industry very badly suffered, as they were unable to pass on the steep price increases to the final customers, due to price resistance, the stetement said.

The textile minister at the centre is Dayanidhi Maran, member of the DMK party that has recently lost the elections in Tamil Nadu.

South Indian mills have a total spindleage of 29 million, with Tamil Nadu alone having 21.1 million. Thulasidharan hoped that with the support of the government and cutback in production the crisis situation will blow over and the industry will rebound. In a representation sent to the Tamil Nadu chief minister, the association has pleaded the state government to take up the issue personally with the Prime Minister.

The apparel industry on the other hand, has said while their sympathies are with the plight of the spinning mills, any plans to resume export of yarn must be accompanied by making imports duty free too.