Home / Knowledge / News / Textiles / Availability of cotton and cotton yarn
Availability of cotton and cotton yarn
22
Nov '10
There has been unprecedented increase in cotton prices in India during the last few months. From Rs.23000 a candy in October 2009, cotton prices increased to Rs.47000 earlier this month and have remained around Rs.45000 thereafter. Allowing exports from 1st November 2010 is taking away for exports a substantial portion of the crop that is arriving in the market, creating an artificial shortage. Registration of cotton export contracts was opened on 1st October 2010, and the entire quantity of 5.5 million bales earmarked for registration got applied for in 10 days.

Most of the registration was on Cash Against Documents (CAD) basis, for which no documents other than a contract was necessary. The speculative nature of contract registration is evident from the fact that nearly 1.5 million bales got registered on a Sunday. At present, there is hardly any cotton available in the market for the domestic mills to buy. The situation can improve only if exports are postponed to the extent possible at this stage.

The Cotton Yarn Advisory Board (CYAB) established by Government has assessed cotton yarn production during the year at 3370 million kgs. The consumption and export demand, together has been assessed at 3376 million kgs and the ending stock of 84 million kg is more or less at par with the opening stock of 85 million kgs., during the beginning of the year.

Thus, production and domestic availability of cotton yarn in the country are at an all time high record and export as a percentage of production is comparable with the previous years, excluding the two years of global slowdown. With garment exports stagnating or declining, domestic consumption of yarn cannot be expected to grow this year. The recent reports on alleged non-availability of cotton yarn in the domestic market are obviously not substantiated by data.

Cotton yarn prices have increased substantially during recent months as a direct consequence of the increase in cotton prices. However, the spinning industry in India has been supplying yarn to the domestic industry at prices lower than what they are realizing from export markets and the importers also incur additional costs on freight, insurance etc. If countries that import Indian yarn at higher cost are able to increase their garment exports and our garment industry is not, there should be reasons other than yarn prices for this and both the industry and government need to address these.

It is necessary to ensure that all the segments of the textile and clothing industry are allowed to function on the basis of their core competence. Spinning and processing are the most capital intensive sub-sectors of the textile and clothing industry. Huge investments have been made by these segments by using the TUFS. Their ability to repay these loans depends on their making reasonable profits. At the current cotton cost, they cannot make much profit.

Any measures to interfere with the efforts ofthese segments to pass on raw material costs to the next stage or to prevent their export activities will have adverse consequences on the ability of the units to repay loans. These would also impact modernisation and expansion of capacity in existing units as well as new investments for capacity building. This situation will only lead to long-term shortage of yarn and fabrics in the market, which will not be in the interests of either these segments or the down stream value added segments.


Must ReadView All

EU renews GSP+ scheme for Pakistan 2 years

Apparel/Garments | On 24th Feb 2018

EU renews GSP+ scheme for Pakistan 2 years

Pakistani exporters can enjoy preferential duties on exports to the...

Surat wary of e-way bills

Textiles | On 24th Feb 2018

Surat wary of e-way bills

There is no respite for Surat’s textile manufacturers and retailers....

Retailers choose sides in Alibaba-Tencent battle in China

Apparel/Garments | On 24th Feb 2018

Retailers choose sides in Alibaba-Tencent battle in China

Two big Chinese firms— Alibaba Group Holding Ltd and Tencent Holdings ...

Interviews View All

Krishnanand Tripathi
Textrade International Ltd

We believe in vocational education for entry-level employees, offering...

Abhimanyu Singh Rathore & Barbara Anna Kosiorek
Kannbar

‘Blending cultures is the true beauty of fashion, where one’s imagination...

Vasanth Kumar
Max Fashion India

‘Traditional high-street retailers are now willing to offer franchisees to ...

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Tejas N Patel, Navin D Patel

Founded in 1999 by Navin Patel in the name of Tejas Fabrics with 100...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Anisha Chaudhari
Threads & Shirts

Threads &amp; Shirts is a freshly-tailored concept providing men/women a...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

February 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
70.6%
No
12.7%
Skip
16.7%

Total Votes: 102

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.7%
No
29.4%
Skip
6.9%

Total Votes: 102

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
88.2%
No
8.8%
Skip
2.9%

Total Votes: 102

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
83.3%
No
7.8%
Skip
8.8%

Total Votes: 102


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search