Surge In Domestic Cotton Prices Plagues Textile Sector

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Surge In Domestic Cotton Prices Plagues Textile Sector

The Indian textile sector has expressed concern over the recent hike in prices of cotton. The surge in prices is likely to adversely affect the entire textile value chain, observers opined. The textile industry happens to be the main consumer of cotton. The fears of the industry insiders are augmented by the fact that the price of Shankar 6 Variety of cotton shot up from INR 43,000 a month back to INR 46,000 in the current month. In a media statement, the South India Spinners’ Association President, S.K. Rangaraja said, “The yarn prices had gone up for some varieties. The market might not absorb any further increase in yarn price.” The price factor is only one side of the paradigm as the quality of cotton available to the spinners has also gone down appreciably it was noted. The fears about prices the industry has is allied by the factor that there will be no let down on the trend even in the next cotton season in wake of the fact that China was importing cotton in large quantities. The cotton mill owners also said that the hike in prices of cotton resulted in higher yarn prices. Consequently, the prices of some of the varieties of yarns have increased by about 15%. In the above scenario, only those mills that had purchased cotton at the beginning of the season are sitting pretty now. People in the textile industry who purchase cotton for their daily needs are the worst affected in the current scenario. This is the state of affairs with small and medium-scale enterprises as their existing inventory level of cotton is very low. Industry sources also disclosed that the problem is accentuated by the fact that China is importing large quantities of cotton this season.