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Profitability of Indian yarn spinners may face pressure
13 Apr '17
1 min read
Profitability of Indian yarn spinners may come under pressure due to various challenges like high raw cotton prices, while demand for cotton yarn is expected to remain moderate. Under the circumstances, spinners may opt to reduce capacity utilisation or contribution. Hence, their profitability is likely to remain under pressure in the near future.
"Other than profitability pressures, higher cotton prices will lead to higher working capital requirements and in turn higher borrowings," a news agency informed quoting an ICRA report.
"Cotton prices remained high due to low domestic availability in the first half of 2016-17 and also due to higher volume of exports. In the last quarter of fiscal 2016-17, domestic cotton prices averaged at Rs 120 per kg, up 29 per cent year over year," the ratings agency said.
"The improved competitiveness of polyester fibre as against cotton fibre resulted in a 5 per cent year on year growth in synthetic yarn production in fiscal 2017," the report observed. (AR)
"Other than profitability pressures, higher cotton prices will lead to higher working capital requirements and in turn higher borrowings," a news agency informed quoting an ICRA report.
"Cotton prices remained high due to low domestic availability in the first half of 2016-17 and also due to higher volume of exports. In the last quarter of fiscal 2016-17, domestic cotton prices averaged at Rs 120 per kg, up 29 per cent year over year," the ratings agency said.
"The improved competitiveness of polyester fibre as against cotton fibre resulted in a 5 per cent year on year growth in synthetic yarn production in fiscal 2017," the report observed. (AR)
Fibre2Fashion News Desk – India
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