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Against all odds Gujarat cotton yarn makers see revenue cross 2019-20 mark


Despite the pandemic cotton yarn makers in Gujarat are set to surpass their 2019-20 revenues. As per All Gujarat Spinners’ Association (AGSA) estimates, the industry’s turnover was Rs 29,000 crore in 2019-20. Spinning units in the state already achieved this by the end of third quarter of 2020-21, riding on increased demand and higher prices of cotton yarn.

Cotton yarn prices have increased 56 per cent from April to November 2020, when prices stood at Rs 265 per kg. Cotton yarn price was Rs 195 in the first half of March 2020, after which it fell to Rs 170 in April soon after the lockdown. With a sharp increase in prices recently, the industry regained momentum. At this price, realisation from orders has increased for cotton yarn makers. Consequently, revenues of Q4 of 2020-21 will be growing at 25% from the corresponding quarter last year, stated AGSA.

Cotton yarn prices rose over the past two months or so due to an unprecedented increase in demand, especially in the export market. Pipeline stocks dried up a few months of the lockdown and demand sharply increased. Currently, all units are operating at full capacity while at least 70% of the stock is being exported to countries like Vietnam, Bangladesh and China.

The surge in demand also helped industry players make up for revenue lost during the lockdown and after it. Industry players said that with fatter margins due to higher prices, the industry turnover for 2020-21 will grow by 10% against 2019-20. Gujarat is home to at least 140 spinning units with an installed capacity of some 50 lakh spindles according to AGSA. Daily production is at 40 lakh kg.