Cotton prices have dropped to a three-year low of Rs 53,500 per candy (356 kg) as a result of falling global prices. More than 25 per cent of Gujarat’s ginning mills are now non-operational due to financial challenges brought on by the price decline, even during the busiest time of year.
Cotton prices have dropped to a three-year low, falling below Rs 54,000 per candy. Ginning units, which had purchased raw cotton at higher prices, are facing significant challenges as rates continue to decline, putting additional pressure on the mills. Despite operating at a loss, ginning units continue their business to maintain turnover due to their high fixed costs, according to Apurva Shah, Vice President of the Gujarat Chamber of Commerce and Industry (GCCI).
Industry reports reveal a decline in cotton cultivation in Gujarat, with an estimated production of 88 lakh bales this year, down by 4 lakh bales compared to the previous year. Apurva Shah explained, “November to January is the peak cotton season, yet many ginning units are not running at full capacity. Gujarat has approximately 800 ginning units, of which 450 are fully operational, while several others operate only a few days a week. Around 20 per cent of mills have yet to begin pressing this season.”
Jayesh Patel, Senior Vice President of the Spinners’ Association Gujarat (SAG), stated, “Currently, spinning units are seeing some profitability as cotton prices have fallen below Rs 54,000 per candy. The Cotton Corporation of India (CCI) is now purchasing large quantities, and we urge them to reserve a portion for the Indian textile industry to ensure it receives priority.”
