India’s cotton textile industry is experiencing a boom after more than a decade. The last two years were bad for the sector with little expansion. The current boom is expected to last till at least March 2021. The price per kilogram (kg) of woven cotton yarn increased from ₹193.81 in August last year to ₹267 in January this year—a 37.7 per cent rise.
Indian cotton year extends from October to September.
The prices in September, October, November and December were ₹205.23, ₹210.45, ₹235.10 and ₹242.22 respectively. The January 2021 price is 10.23 per cent more than the price in the previous month.
The sharp rise in cotton yarn prices in the last few weeks is because of dried-up inventories as supplies have failed to match demand and spinning mills resumed operations late across the country.
Cotton fibre price has not risen significantly but cotton yarn has because of high domestic and export demand. Huge orders are coming in from Bangladesh and Vietnam.
Labour was limited during lockdown-induced factory closures that resulted in limited produce. When demand rose later, traders and agents started selling to those who were ready to pay higher prices, and therefore, prices witnessed a significant rise in the last six months.
The prices per kg of 30s count combed cotton yarn were ₹190, ₹215, ₹225 and ₹240 in September, October, November and December last year. Its price is ₹260 per kg now-an 8.33 per cent rise over the December figure and a 36.84 per cent rise over the September price.
The margin expansion—an increase in the rate of profit made on a product—is the highest to date.
Weaving charges have also risen from 12-15 paise/pick to 20-24 paise/pick.