Indian Textile Industry Hit Hard by Power Shortages

By Jim.Robinson|September 18, 2012

Despite the growing trend of mills blending cotton with synthetics in an attempt to keep their raw materials costs down, it’s understood that the natural fiber is usually at odds with the fossil fuel. Cotton has been losing market share to synthetic fibers for years, even though overall consumption continues to rise due to the expanding global population.

But the decreasing use of oil doesn’t always result in an uptick in cotton usage. In fact, the decreasing use of oil is directly contributing to falling cotton consumption … at least in India, the world’s second-largest cotton producer and consumer. That’s because in this case, the oil isn’t being used to extrude fiber, it’s being used to power textile mills.

A 9 cent/liter hike in diesel prices instituted by the Indian government last week has received strong reaction from the weakening Indian textile industry.

S. Dinakaran, chairman of The Southern India Mills Association (SIMA), said in a press release that “the diesel price hike of 5 rupees per liter … has come as a rude shock to the ailing textile industry.”

The state of Tamilnadu, which accounts for 47% of India’s total yarn production, is facing a 50% power reduction, and the price increase likely will aggravate that situation. Dinakaran also said that India is already at 20% price disadvantage in yarn production costs compared to some of its competitors, such as Bangladesh. SIMA has appealed to India’s Prime Minister to roll back the price hike.