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Cotton price increase is not sustainable: ITF

11 Dec '17
2 min read

The increase in cotton price seen last week is only a short-term speculative increase and will not sustain, according to the Coimbatore based Indian Texpreneurs Federation (ITF). Around 80 per cent of this season’s cotton crop has not yet reached the market, this translates to nearly 3 crore bales (of 170 kg each) and this will balance the pricing pressure.

The price of Shankar-6 cotton variety is currently hovering around Rs 38,800-39,000 per candy of 356 kg, which is about Rs 1,500 more than the price prevailing a month ago.

Although there are issues with the quality of crop in the current cotton year in few states, there will not be much drop in output this year, ITF said in a press release quoting its field reports from all the cotton growing states.

“As usual, some sections of trade are creating panic to increase the cotton prices by spreading specific negative info about cotton crop (20 per cent facts and 80 per cent exaggeration),” the release said.

The massive supply of remaining crop will balance the pricing pressure in the coming weeks, it added.

Referring to the issue of cotton quality, ITF said it has already affected by way of drop in realisation levels in spinning mills and this is leading to straight 2 to 3 per cent increase in manufacturing cost at yarn stage. It has advised all its members to plan for import of cotton needed for two months of the mills consumption in this cotton year to mitigate the risk. “With our last year import experience, even with Rs 2,000 more cost, mills can get a better cost advantage because of superior quality of imported cotton with less trash and less contamination etc.”

This week, a 15-member delegation from ITF Cotton Team will visit two important cotton growing states to meet partner ginners to work out an action plan for the current year. (RKS)

Fibre2Fashion News Desk – India

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