The sharp rise of over 35 per cent in domestic cotton prices since May 2016 will squeeze ginners and spinners profitability by over 15 per cent, says India Ratings and Research (Ind-Ra). Ind-Ra expects prices to remain elevated around the current levels of Rs 120 per kg to Rs 127 per kg till the end of the cotton crop year of September 2016. The spike in cotton prices will adversely impact the profitability of pure cotton ginners and spinners due to their inability to pass on this steep increase to their customers, at once, due to decreasing cotton demand and increased competitiveness of manmade fibre.
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The Cotton Textiles Export Promotion Council, known as TEXPROCIL, has been the international face of cotton textiles from India facilitating exports worldwide. The Council connects international buyers with appropriate suppliers and facilitates interaction that enables them to source their specific needs. Siddhartha Rajagopal, Executive Director, Texprocil, provides some wish-list for the industry and the Government in boosting cotton consumption in India.
The current global apparel market is estimated $1,100 billion with trade value of $700 billion. European Union is the largest consumer market, reaching $350 billion per annum, whilst China is the largest exporter with $288 billion. Leading countries such as EU, USA & Japan focus solely on highest value stages of textile and apparel value chain, that are designing, marketing & distribution. Meanwhile, the manufacturing activities are concentrated in India, China & other developing countries such as Bangladesh, Pakistan, Vietnam, Indonesia, etc.
The weakness in trade in China, the world’s second-largest economy, continued in July 2016. China’s exports fell again in July by an unexpectedly wide margin. Exports fell by 4.4 per cent to $184.7 billion, of course, a slight improvement over June’s 4.8 per cent contraction, the country’s customs data showed. On the other hand, imports fell 12.5 per cent to $132.4 billion rising from a decline of 8.4 per cent. Weak global demand has hampered efforts to shore up Chinese trade and stave off job losses in export industries.
Soaring cotton prices are spinning the spinners’ future out of control. Dipping cotton stock is adding to the woes. At this stage, a sharp drop in cotton prices is only a far cry, reveals an ITJ Exclusive Report. Cotton has never failed in the last one decade to kick up controversies with various interests getting down to a tug of war trying to call the shots. The year 2006 is no exception. The sharp rise of over 35 per cent in domestic cotton prices since May 2016 is certain to squeeze ginners and spinners profitability by over 15 per cent, says India Ratings and Research (Ind-Ra).
The sharp rise of over 35 per cent in domestic cotton prices since May 2016 will squeeze ginners and spinners profitability by over 15 per cent, says India Ratings and Research (Ind-Ra). Ind-Ra expects prices to remain elevated around the current levels of Rs 120 per kg to Rs 127 per kg till the end of the cotton crop year of September 2016. The spike in cotton prices will adversely impact the profitability of pure cotton ginners and spinners due to their inability to pass on this steep increase to their customers, at once, due to decreasing cotton demand and increased competitiveness of manmade fibre.
The Cotton Textiles Export Promotion Council, known as TEXPROCIL, has been the international face of cotton textiles from India facilitating exports worldwide. The Council connects international buyers with appropriate suppliers and facilitates interaction that enables them to source their specific needs. Siddhartha Rajagopal, Executive Director, Texprocil, provides some wish-list for the industry and the Government in boosting cotton consumption in India.