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High cotton prices compel mills to change product mix
Oct '10
With cotton prices prevailing at a 15-year high, traders now are considering purchasing cotton in smaller volumes, rather then placing bulk orders as they generally do in the initial six months from start of a new season.

Following the traders, the millers too are considering to accumulate stocks to meet their requirements for just two months, rather than the usual six months.

The textile mills are also apprehensive that the exporters rush for acquiring cotton to secure their November shipments, may further accelerate the cost of the commodity.

A very good exportable variety of cotton is now being traded at record high rates of Rs. 38,500 per candy (1 candy=356 kgs), as against Rs. 22,500 during the corresponding period, a year ago.

An upsurge of around 70 percent has been recorded in the prices of cotton over last year, while yarn prices too have surged by around 50 percent during the period.

In end part of September 2009, whereas 30s count yarn was traded at a price of Rs. 125 per kg, the same is now being traded at a high of Rs. 185 per kg.

40s count yarn prices too have escalated from last year's Rs. 132 per kg to Rs. 197 per kg. October to March period is considered to be decisive for the textile units, as it is during this period that they make bulk purchase of cotton to accumulate it for use, during rest of the year.

But this year the mounting prices have constrained some of the mills to make daily purchases. Also many of the garment producers are now receiving orders for polyester/cotton blends, it being cheaper.

Submitting to client's demands, some of the companies have even started producing fabrics and garments using polyester/cotton blends, since the last two months.

Fibre2fashion News Desk - India

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