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Stock Advisory In Indore, Speculative price increase of cotton not sustainable, says textile body
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Indian Texpreneurs Federation, an apex body of the textile industry, today expressed confidence that cotton prices would come down and the speculative price increase during last week was not sustainable.
Though there are issues with the ‘quality of the crop’ in the current cotton year in a few states, overall there would not be much drop in the cotton crop this year, ITF convenor Prabhu Dhamodharan said.
Charging a section of the trade with creating panic to increase prices by spreading specific negative information on cotton crop, Prabhu said 80 percent of the crop was yet to reach the market.
“This translates to the tune of nearly three core bales.
This massive supply will balance pricing pressure in the coming weeks,” he said, citing ITF field reports.
He said ITF has advised members to plan for cotton import for two months of the mill consumption this cotton year to mitigate the risk.
“With our last year import experience, even with Rs. 2,000 more cost, mills can get a better cost advantage because of the superior quality of imported cotton with less trash and less contamination,” he said.
Apart from this, the domestic cotton quality here was a big issue this year due to various factors, he said, adding there has been a drop in realisation levels in spinning mills, which is leading to a straight two to three percent increase in manufacturing cost at the yarn stage.
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