Rising Cotton Prices in India Hit ₹58,000, Posing Challenges for Exports and Spinning Units
Reaching Rs 58,000 per candy (356kg) from Rs 55,000 earlier in the month. The rise is attributed to lower crop arrival and increased demand, impacting the competitiveness of cotton exports. The slower arrival of Indian physical cotton, particularly from Gujarat, has contributed to the price surge.
Experts suggest that the fluctuations are influenced by factors such as market demand, supply dynamics, and external conditions. Despite improved demand in the textile market over the past two months, the higher cotton prices are causing challenges for spinning units in maintaining profitability.
The senior vice president of the Spinners’ Association Gujarat (SAG), Jayesh Patel, noted that while there was a good demand for exports when cotton prices were stable around Rs 55,000 per candy for almost two months, the recent increase has affected export competitiveness. Cotton yarn prices have also risen from Rs 235 to Rs 255 per kilo in February, making Indian cotton more expensive in the international market.
The increase in yarn prices has led to a slowdown in both domestic and international demand. Although new export orders are available at around Rs 253 per kg, inclusive of all costs, the recent spike in prices, coupled with the Rs 20 per kg increase in yarn prices, makes exports less viable even with government incentives.
The report indicates that while there is optimism for continued improvement in global cotton prices, the current trend poses challenges for the Indian cotton industry, impacting both domestic and international trade.
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