Calculus of cotton is always erratic without any clues. After reaching a peak, cotton, and cotton yarn prices are now experiencing a sharp decline. What is the industry impact?

Indian economy is mainly dependent on agriculture, and textile manufacturing. Cotton is of paramount importance for the manufacturing sector. Currently, textile industry is in doldrums due to falling cotton prices, which is affecting yarn prices, and slackening demand of fabric manufacturers as well.

Prices of raw cotton which has reached historic heights during 2010, have started slipping during the past couple months. Earlier, cotton prices were ranging from ` 30,000-32,000 per candy. During April, cotton prices were soared up to ` 62,000 per candy (356 kg). This tumbled to ` 50,000 by the end of April. With the global textile industry seized by the panic of selling on a large scale, cotton prices witnessed a declining trend. Spinners are left behind with huge volume of cotton yarn in stock, while there is a slackening trend in the demand of cotton fibres. Price of Shankar-6 raw cotton plummeted from ` 61, 625 to ` 54, 625 per candy during March. Prices of Shankar-6 have decreased more than 26%.

Falling cotton & cotton yarn prices - panic grips the Indian textile industry