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Textile industry worried about steep hike in cotton prices

The Indian textile industry may import more cotton than estimated as domestic production might be less than expected 352 lakh bales and also international cotton prices are lower than Indian prices. In the last few weeks, there has been a steep hike in cotton prices, by about Rs 6,000 a candy which is a matter of concern to the textile industry for which cotton is the main raw material.

Cotton price (Shankar – 6 variety) is now Rs 39,600 a candy compared to Rs 34,300 in April and Rs. 34,000 in January this year, according to data obtained from sources in the trade. Prior to that it has been fairly stable in the Rs 32,000 to Rs 34,000 range between January and In January last year, the price was Rs. 32,000 a candy.

This has hit the acquisition prices for textile mills that do not have stock of the raw material. The mill gate price is more than Rs. 40,000 a candy. This is an abnormal increase, according to C Varatharajan, President of the South India Spinners’ Association.

However, sources in the Ministry of Textiles are not worried as there is sufficient availability of cotton. Both imports and exports are at the expected levels. Prices also depend on market sentiments, said a senior official in the Ministry of Textiles. At its meeting in February, the Cotton Advisory Board estimated imports to be 11 lakh bales and exports to be 70 lakh bales this year.