3 months ago
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The recent hike in cotton prices in the international market and of cotton sold by the Cotton Corporation of India (CCI) in the domestic market has become a matter of concern to textile mills, especially small-scale units.
Atul Ganatra, president of the Cotton Corporation of India, said the current Indian cotton prices are lower than the international prices by almost ₹4,000 a candy and the association expects cotton exports this season to be almost 20 lakh bales. About 65% of the Indian crop (about 200 lakh bales) have arrived in the market and the domestic demand is “very good”.
However, Koti Rao, president of the AP Textile Mills Association, told The Hindu on Saturday that the viable price of cotton for the mills should be about ₹58,000 a candy (254 kg). However, the price of cotton sold by the CCI went up to ₹62,000 a candy. “A few people have hiked the prices when they bid for cotton sold by the CCI,” he alleged.
According to Mr. Rao, there is hardly any sign of revival of the textile industry and if the current situation persists, more textile mills will close down.
N. Pradeep, who runs an MSME mill in Tamil Nadu, said the increase in cotton prices (sold by the CCI) by almost ₹3,500 a candy in the last one week poses significant challenges for yarn manufacturers. “The textile industry is grappling with poor international demand and domestic sales and import of finished garments has intensified competition. It is worth noting that the Reserve Bank of India (RBI) has rated the textile industry as Red, further highlighting the severity of the situation. The CCI should reconsider its pricing strategy and ensure that future adjustments are reflective of the current market realities,” he said.
According to J. Thulasidharan, president of the Indian Cotton Federation, it remains to be seen if the current hike in prices will sustain in the Indian market.
