Textile Industry Concerned Over Cotton Price Volatility
Amidst persistent fluctuations in cotton and yarn prices, textile mills and garment units in Tamil Nadu are seeking measures to improve cotton availability.
Ashwin Chandran, Chairman of the Confederation of Indian Textile Industry (CITI), stated that the surge in global demand for cotton yarn is a primary reason for the price volatility.
He noted that demand for yarn in the international market has improved compared to recent years. While demand for cotton yarn was sluggish from 2023-24, demand for textile products across the value chain began to rise last December.
Demand for yarn from China and Bangladesh has increased, and the domestic garment market is also witnessing a recovery, leading to an improved yarn market. Hosiery yarn exports primarily originate from mills in Gujarat, whereas mills in Tamil Nadu have a smaller share in this segment.
Cotton futures prices had once touched 92 cents per pound and currently stand at around 86 cents. According to Chandran, the landed cost of clean cotton has risen by approximately ₹70 over the past year, while yarn prices have increased by about ₹95 per kilogram.
Meanwhile, the Tiruppur Exporters and Manufacturers Association has appealed to the central and state governments to ban cotton exports. The association alleged that since January, certain large spinning mills and traders have artificially restricted cotton supplies, driving up yarn prices and placing increased pressure on small and medium enterprises (SMEs).
According to the association, the country's cotton requirement is around 350 lakh bales, whereas domestic production stands at approximately 290 lakh bales. Although the government removed the 11% import duty on cotton and facilitated the import of about 62 lakh bales, prices continue to rise. The association has attributed this to artificial market manipulation and demanded government intervention.
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