The textile industry has been struggling with low demand for almost a year but is now optimistic. This is mainly due to reduction in inventory across the value chain, China buying 6,000 tonnes of cotton yarn last month and fresh orders by many big players.
Spinning mills in Gujarat are running at about 80% capacity and demand is expected to remain stable over the next few months.
The last month has also seen an improvement in demand in the domestic market as cotton prices have stabilised. There are more than 125 spinning mills in Gujarat and their installed capacity is more than 45 lakh spindles.
Jayesh Patel, senior vice-president, Spinners Association Gujarat (SAG), said, “Cotton prices are stable at around Rs 55,000-55,500 per candy and cotton arrivals in the market have been good. Yarn prices are at Rs 235-237 per kg (30 count) and though still a bit high, we have seen export orders coming in. China bought about 300 containers (about 6,000 tonnes) of yarn last month. Most of its supply is coming from Gujarat. Many global brands have also started placing orders.
Patel said the entire textile value chain has witnessed lower demand mainly due to accumulation of inventory. As inventory levels fall, demand has increased again.
“There is a liquidity problem in the market, but we hope the situation will return to normal soon.” Bharat Chhajed, former chairman of PDEXCIL, said, 'Last month also, there is an improvement in demand in the domestic market. Traders in Ahmedabad are buying gray fabric with confidence due to improving demand scenario. Cotton prices have also seen some stability and this has increased demand.
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