Hike in cotton price, each day, continues to be a severe problem!
If that wasn’t enough, now there is one more reason to worry as The Cotton Association of India (CAI) has said that the crop for 2021-22 (beginning 1 October) would be 335 lakh bales.
Now that’s a reduction by 8 lakh bales as the previous estimate was of 343.13 lakh bales.
A report of Financial Express says that giants like Welspun Group are feeling the negative impact of hike in cotton prices despite having captive spinning units at its Vapi (South Gujarat) and Kutch units.
International buyers would give 15 to 20 per cent price difference considering the increase in raw-material prices; however, current inflated rates of cotton are unprecedented, says Chitan Thaker, President, Welspun Group, claiming that in some cases, production costs have gone up to such an extent that export orders taken a couple of months ago or earlier could now be executed only at a loss.
The CAI said in a release, “We estimate the total cotton supply for the months from October 2021 to March 2022 at 343.68 lakh bales, which includes arrivals of 262.68 lakh bales, imports of 6 lakh bales and an opening stock of 75 lakh bales at the start of the season.”
The trade body also estimated cotton consumption for the months from October 2021 to March 2022 at 175 lakh bales, while export shipments are estimated at 35 lakh bales up to 31 March 2022.
The CAI has maintained its consumption estimate of 340 lakh bales for the current crop year 2021-22. The previous year’s consumption estimate was 335 lakh bales.
Across the country, power looms are forced to suspend or cut their operations, while spinning mills have frozen production as output prices in local and export markets are barely in sync with the inflated cost of cotton.
If reports are to be believed, it is feared that Tamil Nadu’ textile industry might face cotton shortage during August-October resulting in industrial unrest.
