According to an India-Ratings report, the face-off between the US and China will benefit India’s textile exports in 2HFY21. The agency expects the Indian players to increase their already strong market share in terry towels and bed linens, led by supply chain diversification away from China.
Even though the domestic demand is moderate, Indian textile companies have significantly increased their plant capacity use in August 2020, after the lockdown was gradually lifted in the country, says the report.
The agency expects textile players to record 15-35 per cent year on year (yoy) decline in their top line and 20-50 per cent yoy drop in operating profits over FY21. The prices of textile products have recovered broadly in August 2020 from the lows of April-May 2020. The prices of international cotton (US) are recovering steadily month on month — in August 2020 it witnessed 4 per cent rise, after dipping in April 2020.
Indian cotton prices increased about 5 per cent month on month in August last week, following a partial correction in the international prices over July 2020.