October 21, 2015 The spinning mill owners of the Kongu Nadu region of the state today said they are facing problems in doing business due to alleged cartelisation by Chinese yarn buyers.
The owners also submitted a letter to the Union Textile Ministry pertaining to the issue.
Chinese yarn buyers and traders were crushing the Indian yarn manufacturers allegedly by forming a cartel, Indian Texprenuers Federation (ITF), a body of spinning mills in this textile region, said.
A cartel is an agreement between competing firms to keep prices under control or check any new competitor's entry into market. Under this sellers or buyers agree to fix prices of selling, purchase prices, or lower production.
ITF Secretary Prabhu Damodaran, in the letter submitted to the Union Textile Secretary, said that allowing the yarn manufacturers to open common selling offices in China would help avoid exploitation by the buyers, besides strengthening Indian players with updated an constant market intelligence
He also said that instead of waiting for mega trade pacts, the ministry, in coordination with Commerce ministry, should soon initiate textile-specific trade pacts with various untapped markets.
Exports of cotton yarn and fabrics showed a positive growth of five per cent in September and with big opportunity and huge capacity within the country, a little push and coordinated efforts by the ministry will beat the downtrend in export, helping the spinning and garment sectors to come out of current trend of losses, Damodaran said.