Gujarat textile industry has been experiencing low demand for more than a year. The new cotton season has brought little hope as textile units are struggling to operate at full capacity. While spinning mills are running at 70% capacity, ginning units are running at only 40% capacity. The high price of Indian cotton in the international market is hindering the export business of the industry.
“Demand in the international market is low, and Indian cotton is not competitive in terms of prices,” said Jayesh Patel, senior vice-president, Spinners Association Gujarat.
Currently, yarn prices are around Rs 230 per kg, and spinning units face a price disparity of Rs 5-10 per kg. This problem has increased due to less arrival of raw cotton due to unseasonal rains in some states.
Gujarat Chamber of Commerce and Industry (GCCI) secretary Apoorva Shah also expressed similar sentiments. “The cotton season, which usually peaks between October and February, has seen reduced activity due to lower cotton arrivals, falling prices and unseasonal rains. The state’s 900 ginning units are operating at a fraction of their normal capacity, running only one shift instead of the usual three during the peak season,” he said.
“Unseasonal rains have further affected the quality of cotton. Cotton has more moisture. Ginning units are incurring losses of around Rs 1,000-1,500 per bale and are running at only 33% of their capacity,” said Shah.
Cotton prices are around Rs 55,000 per candy. Experts believe that due to high minimum support price (MSP) and low arrivals, prices will remain in the same range. Last year, farmers were not ready to sell cotton at low rates and this year also the arrival is less. Gujarat gets around 10-15 lakh bales from Maharashtra for pressing as the state has seen a significant increase in spinning activities in the last decade. However, if demand does not improve soon, the textile sector, especially ginning and spinning units, may face huge challenges for the second consecutive year.
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