With cotton prices recently falling to Rs 61,000 per candy (356 kg), down almost 45% from their peak of Rs 1.1 lakh, there is no silver lining for the textile industry. Since the Covid-19 pandemic, Gujarat, India's textile hub, has been reeling under low capacity, falling demand and rising production costs.
no hope
Financial year 2022-23 was no different, with skyrocketing cotton prices being the prime culprit. While cotton prices have recently come down to Rs 61,000 per candy (356 kg), down almost 45% from their peak of Rs 1.1 lakh, there is no silver lining for the textile industry. With cotton from India being more expensive than other producers, textile manufacturers in Gujarat are unable to compete with their counterparts in China, Vietnam and Bangladesh.
lost global competitiveness
Industry players say that, the capacity utilization has dropped to around 65%. Rahul Shah, co-chairman of the GCCI Textiles Taskforce, said, “In the last one year, our industry has lost competitiveness globally. Indian cotton used to be at least 5% cheaper than international rates. effective rates remain high compared to the international market despite the recent softening. "Low cotton yield is a growing concern. Spinning mills were forced to shut down operations in an unprecedented situation witnessed last year .
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