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Indian cotton traders face ruin
18 May '11
2 min read
Cotton traders in India are in a predicament due to the sharp fall in price of cotton. The price of a cotton candy (1 candy = 356 kg) which was Rs. 62,000 in April has fallen to Rs. 44,000 for qualitatively good cotton.
The predicament is severe for traders who have bought cotton when the price was high. The loss of precious time while waiting for the price of cotton bales to rise is resulting in tremendous financial loss to them.
Almost all traders have reported to have faced loss in business due to the fluctuation in prices of cotton. Some of them face more loss as spinning mill owners keep rejecting consignments while raising objections on the quality of lint.
However, it is the small traders who had purchased cotton bales when the prices were higher who face complete ruin as no spinning mill is willing to lift their stocks, as they are waiting for prices to stabilize.
According to analysts, the only way to firm up the price of cotton, both raw as well as processed, and help the traders to come out from their difficulty is to extend export permit for at least 1.5 million bales. It needs to be seen whether the Government will come to the rescue of cotton traders.
The predicament is severe for traders who have bought cotton when the price was high. The loss of precious time while waiting for the price of cotton bales to rise is resulting in tremendous financial loss to them.
Almost all traders have reported to have faced loss in business due to the fluctuation in prices of cotton. Some of them face more loss as spinning mill owners keep rejecting consignments while raising objections on the quality of lint.
However, it is the small traders who had purchased cotton bales when the prices were higher who face complete ruin as no spinning mill is willing to lift their stocks, as they are waiting for prices to stabilize.
According to analysts, the only way to firm up the price of cotton, both raw as well as processed, and help the traders to come out from their difficulty is to extend export permit for at least 1.5 million bales. It needs to be seen whether the Government will come to the rescue of cotton traders.
Fibre2fahion News Desk - India
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Jason Kent
British Textile Machinery Association (BTMA)
Mohankumar Rathinaswamy
Cheran Machines India Private Limited
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