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Low stock-to-mill use ratio worrying textile sector
Oct '10
Every year, the new cotton season begins in October. It is an important period for the Indian textile sector as 60 percent of it is still based on cotton.

The year 2010-11 appears to be difficult for the industry as raw cotton prices are escalating in spite of the possibility of abundant cotton production which is expected to touch 32.5 million bales. During 2009-10, the cotton production was 29.5 million bales.

Currently, price stabilization has become an issue of great concern for the whole textile value chain. Textile factories buy most of the cotton required for the year in April-May, when the fresh cotton bundles come in the market.

The stock-to-mill use ratio in India had been recorded at 16 percent on 30th September which is quite low as compared to 30 percent in China. The carryover stock is also low in India and is around 4 million bales as compared to 18 million bales in China. There has also been a rise in the global as well as domestic textile consumption this year. All these have raised the cotton requirement.

The price of Shankar-6 cotton variety increased from Rs 30,800 per candy in August to Rs 40,500 now. The price of 40s carded warp cotton yarn has escalated from Rs 187 in August to Rs 213 per kg, at present.

The government of India had announced that only excess cotton would be permitted for exports. The textile sector has been requesting the government to regulate exports of cotton and allow the exports from January 2011 only. The value-adding garment industry is also urging the government to adopt essential measures to check the cotton yarn prices.

Fibre2fashion News Desk-India

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