Image Courtesy: SIMA
Actual consumers of cotton, particularly the cotton textile mills, have been advised by Dr. S. K. Sundararaman, Chairman of the Southern India Mills Association (SIMA), to disregard any information provided by other organisations and instead depend solely on the estimates released by the Office of the Textile Commissioner, Ministry of Textiles, which are based on the recommendations made by the Committee on Cotton Production and Consumption (COCPC) on a regular basis.
Since the cotton supply situation is quite comfortable, he has encouraged the mills through the previous press release to avoid panic buying when the price of cotton unexpectedly climbed from Rs. 55,300 to Rs. 61,500 per candy of 355 kgs during the second fortnight of February.
Reiterating, he notes that the International Cotton Advisory Committee has also declared that speculation, rather than fundamentals, is why cotton prices are higher.
In its second meeting for the cotton season 2023–24, which took place on 14th March 2024, the COCPC projected the opening stock to be 61 lakh bales, the crop to be 323 lakh bales, the imports to be 12 lakh bales, the mill consumption to be 301 lakh bales, the non-mill consumption to be 16 lakh bales, the export to be 27 lakh bales, and a comfortable closing stock of 52 lakh bales, according to the chairman of SIMA.
He added that he has counselled all parties involved in the textile value chain to depend on COCPC data pertaining to cotton since these estimations are more accurate. Once more, he has cautioned the mills while obtaining cotton for inventory purposes.
The chairman of SIMA has claimed that although domestic cotton prices in India have a significant correlation with the market, particularly with ICE, Cotlook “A,” and MCX, speculators periodically raise prices, artificially producing excessive volatility, which has a negative influence on the textile industry’s performance.
