Unwarranted Surge in Cotton Prices Puts Textile Industry in Distress
The textile industry is facing difficulties due to an unwarranted rise in cotton prices, despite the central government waiving import duties on the commodity. Kiran Tarlekar, Chairman of the Vita Powerloom Industrial Cooperative Union, has urged the government to intervene immediately and curb the price hike. Cotton prices have currently reached a record high of ₹70,000 per candy.
Tarlekar stated that, according to a report by the All India Cotton Association, the closing stock of cotton for this season is projected to be 9.3 million (93 lakh) bales—68 percent higher than the previous year. Meanwhile, the central government has waived import duties on cotton until October 26. Consequently, cotton imports are estimated to reach a record 6.3 million (63 lakh) bales this year, compared to approximately 4.1 million (41 lakh) bales imported last year.
With the new cotton crop expected to hit the market from October 26, it was anticipated that domestic cotton prices would decline or, at the very least, remain stable. Contrary to this expectation, cotton prices—which were hovering around ₹56,000 per candy—have surged to a record ₹70,000 per candy in recent days.
This one-sided price surge has plunged the entire textile value chain into uncertainty and distress, even though there is adequate cotton stock in the market, imports have increased, and the arrival of the new crop is imminent. Industry stakeholders suspect that large traders are hoarding significant stocks in warehouses to create an artificial shortage, thereby driving up prices.
Separately, the dyeing industry in Rajasthan has been shut down for the past two months due to a Supreme Court order. This has created a problem of accumulated fabric stocks for the simple powerloom sector. Meanwhile, the automatic powerloom industry is also grappling with various challenges. Consequently, decentralized power looms in Vita, Ichalkaranji, Malegaon, Solapur, and Bhiwandi are operating at limited capacity, and the demand for cotton yarn has also been affected.
If this one-sided surge in cotton prices continues, the state's yarn mills—like the power loom industry—could also face a situation where they are forced to halt production. Industry stakeholders have urged the government to examine the cotton price and stock situation and take necessary measures.
read more :- The rupee opened 4 paise stronger against the dollar at 95.66.
