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Flare up in cotton prices worries textile sector
12 Nov '09
2 min read
Cotton prices are flaring up since the last one month and in some regions are even shooting up over the Minimum Support Price (MSP) mandated by the government, which is causing a lot of discomfort to the cotton yarn, fabric and denim manufacturing industry in India.
The textile and apparel industry is witnessing a revival of sorts since the last few months, with negative growth rates showing signs of slowing down, but shooting up of cotton prices is putting a dampener on the plans of the India cotton textile industry.
Raw cotton prices have been on a roll since mid-October and prices of Shankar-6 variety of cotton which is grown in Gujarat, has moved from Rs 22700-22800 per candy (1 candy=355 kg) on October 12 to Rs 24,600 per candy on November 11.
Most of the reputed cotton traders to whom fibre2fashion spoke to were of the opinion that cotton futures contracts signed in the previous months, were being dispatched mid-October onwards as well as there are also expectations of a shortfall in production figures, which has led to this unprecedented price rise.
The denim industry is witnessing a resurgence of overseas orders since the last 3-4 months and this flare up in cotton prices could prove to be detrimental to the interests of the sub-sector which has the highest export share amongst all segments of the textile industry.
Most of the textile trade bodies have called upon the government to restrict exports of cotton from the country, since in the long term, it could prove to be damaging for the domestic as well as export industry in the country.
Unconfirmed reports suggest that cotton output could dip in two major producing states of Punjab and Maharashtra, which could upset the targets, set by the Cotton Advisory Board, though this was refuted by Mr Joshi, the Textile Commissioner, when fibre2fashion spoke to him, to verify the reports.
The textile and apparel industry is witnessing a revival of sorts since the last few months, with negative growth rates showing signs of slowing down, but shooting up of cotton prices is putting a dampener on the plans of the India cotton textile industry.
Raw cotton prices have been on a roll since mid-October and prices of Shankar-6 variety of cotton which is grown in Gujarat, has moved from Rs 22700-22800 per candy (1 candy=355 kg) on October 12 to Rs 24,600 per candy on November 11.
Most of the reputed cotton traders to whom fibre2fashion spoke to were of the opinion that cotton futures contracts signed in the previous months, were being dispatched mid-October onwards as well as there are also expectations of a shortfall in production figures, which has led to this unprecedented price rise.
The denim industry is witnessing a resurgence of overseas orders since the last 3-4 months and this flare up in cotton prices could prove to be detrimental to the interests of the sub-sector which has the highest export share amongst all segments of the textile industry.
Most of the textile trade bodies have called upon the government to restrict exports of cotton from the country, since in the long term, it could prove to be damaging for the domestic as well as export industry in the country.
Unconfirmed reports suggest that cotton output could dip in two major producing states of Punjab and Maharashtra, which could upset the targets, set by the Cotton Advisory Board, though this was refuted by Mr Joshi, the Textile Commissioner, when fibre2fashion spoke to him, to verify the reports.
Fibre2fashion News Desk - India
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