Export slump, Panipat yarn industry reports 50% drop in production

Mukesh Tandon

Panipat, December 9

With a slowdown in the export industry, the yarn industry in the ‘Textile City’ is also facing a crisis these days. The spinning mills here have reduced the production by 50 per cent these days.

Around 40 lakh kg yarn was being produced here per day. However, due to a poor demand in the overseas markets, the production has reduced to 20 lakh kg per day.

Panipat is a hub for the recycling industry, resulting in the production of yarn out of the discarded clothes. This yarn is being used in making blankets, shawls, curtains, bath mats, bedsheets, bed covers, kitchen accessories etc.

The finalised products are then sold in the domestic market as well as exported to the global market, especially in the USA and Europe.

Panipat has an annual turnover of around Rs 50,000 crore. Of this, Rs 35,000 crore is earned through the domestic market and Rs 15,000 crore from export.

“The Panipat export industry flourished during the Covid-19 pandemic, however, the industry is facing a recession period now,” Pritam Singh Sachdeva, president of the Panipat Industries Association and Northern India Roller Spinners’ Association, said. As Europe is badly hit by the Russia-Ukraine war and the USA is reeling with high inflation and recession these days, the export industry here has been hit, Sachdeva said.

More than 100 open-end spinning mills here used to produce around 40 lakh kg yarn per day, but all these mills depended upon the export industry, he said. Due to a shrink in demand from USA and European countries, the mills have reduced the production by 50 per cent, he added.

“We have never seen such a long recession period in the industry in the past 30 years. The industry witnessed many export slumps but these ended within a short span and industry again reached a boom,” Sachdeva maintained.

Earlier, the millers used to produce a huge stock of yarn, but at present, there is an uncertainty in the market about the rate of cotton and cotton yarn. Due to these uncertain conditions, the millers are in a fear about maintaining huge stock of yarn, he said. Sachdeva added that the payment chain has also been disturbed due to a long slowdown in the domestic as well as overseas markets.

Exporter Vinod Dhamija, chairman of the Haryana Chamber of Commerce, Panipat Chapter, said units like spinning, dyeing, weaving and packaging are all interlinked with each other and the industry at present is in crisis as the demand from the overseas buyers has shrunk around 50 per cent.

The yarn industries are directly connected with export houses and with the slowdown in the export market, the yarn industry is facing a tough time these days, Dhamija maintained.