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Organic cotton fibre prices in India expected to rise: TexPro

May '21
Pic: Shutterstock
Pic: Shutterstock
The price of organic cotton fibre in India is expected to increase in the coming months as the demand is much higher than the supply. The industry is facing a shortage of organic cotton as the organic certification agency and the Agricultural & Processed Food Products Export Development Authority have tightened the norms for organic cotton cultivation.

The organic cotton price in India has been rising since the beginning of this year due to increasing demand. It was ₹134.65 per kg in January 2021 and consistently increased till May 2021 to reach ₹142.58 per kg, recording a growth of 5.89 per cent. It is expected to move up to ₹149.31 per kg in August 2021, rising by 4.72 per cent over the price in May 2021, according to Fibre2Fashion’s market analysis tool TexPro.

The demand of Extra Long Staple (ELS) organic cotton in India is much higher compared to the domestic production. India imports more than 70 per cent of ELS organic cotton of the total domestic consumption, with 25 per cent customs tariff (as on April 1, 2021).

Indian mills faced a shortage of organic cotton due to a high demand which surged the ultimate price. Also, some organic cotton suppliers of India have lost their certification on charges of forgery which supported a price hike, according to Kutubuddin Ahmed, chairman of Envoy Group.

The price difference between organic and conventional cotton increased amid COVID-19 restrictions. According to Shanmugham, president of Tirupur Exporters Association (TEA), the price gap between conventional cotton yarn and organic cotton yarn was just ₹10 per kg before November 2020 and increased approximately to ₹120 per kg by March 2021.

Some organisations and industry experts are working to streamline the supply chain and create a win-win situation for buyers and suppliers to promote the industry business.

The Organic Cotton Accelerator (OCA) has developed a framework to boost the production of organic cotton and promote organic cotton farming. The organisation is providing premium non-GM seeds to farmers along with an on-site capacity building training by field staff. OCA brands and retailers have also committed to purchase organic cotton from the farmers at a fair price at the end of the season.

The organic farmers in OCA’s Farm Programme get higher net profits as compared to the profits from their conventional selling process, while participating brands and retailers pay less for organic cotton compared to ex-mill buying. There is also a strong demand to scale.

People prefer organic cotton clothing all over the world due to its better texture and comfort as compared to synthetics. Organic cotton conserves natural resources, reduces chemical usage, revamps quality of product and works well with non-allergic and toxic-free dyes.

Fibre2Fashion News Desk (KD)

This according to Fibre2Fashion's Market Intelligence Tool - TexPro

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