According to Mr. Mahesh Maheshwari , Executive Director of Nimbark Fashion Limited, the cost of cotton is currently about Rs. 1 lakh per candy. It has been said that in commodity market , there is a price cycle of each product and thus we see the rise of cotton prices today. “I don’t think that cotton prices will continue to stay in this range. When this cycle ends, the cost of cotton candy will settle between Rs. 60000-70000. I believe that in a few months time, we will be able to ascertain whether the crop of cotton will continue to affect the industry or not. During 2011, the cost of cotton rose upto Rs. 60000- 62000 which eventually came down to Rs. 32000 in a few months time. So, as it is said, history repeats itself and we can see a similar pattern today in cotton prices.” says Mr. Maheshwari, while speaking to the Editor of the Textile Value Chain, during the cotton crisis. Excerpts:
Views on Current Cotton Price Crisis
Indian Textile Industry had barriers as far as the prices were concerned, yet, today we see those barriers reducing and an acceptance by the industry to this new development. As necessity is the mother of invention, the cotton price crisis has led to industry into diversifying towards production of unique blends of cotton and other fibers which will benefit the mills to reduce cotton consumption and look forward for new markets. Those mills who were only dependent on cotton production, now have an opportunity to diversify their product range. If cotton cost has increased, parallelly the demand of polyester has increased. When the rate will come down as per the cycle, cotton will be in demand again. There are no droughts this season, therefore there will not be issues in the spinning process. One great market learning of this situation is that the textile industry has developed acceptance to market fluctuations whether it is yarn or fabric.
The future of Indian Textile Industry is bright. I understand that in India, the consumption will be double of what it is today by the year 2030. Owing to the growth of India’s GDP the per capita income has increased, leading to increase in per capita consumption, both quality and quantity wise. In the last few years there has been an increase in lifestyle expenditures. Once upon a time, consumers were not concerned about their wardrobe until the clothes were worn out, but nowadays the trend is to change the wardrobe as per seasons, mood, lifestyle, position, stage/situation in life, etc. Due to COVID-19 lockdown, people did not spend on clothes since they were at home and now, post lockdown I think variety and new trends of clothing are the top priority of individuals with high disposable incomes. With Government of India’s support to textile exports, in the next five years, the growth of export sector will also help the industry to boost revenues.
Advice to Start Ups
The IndianTextile industry is a difficult industry, to start up a new business into. Since the industry is huge, whatever you learn, you’d still be lacking in knowledge. Thus, new age entrepreneurs should have a learning attitude. They should learn from experienced people, from teams and professionals. Textile industry has huge history ; it is not like IT industry which has bloomed in a few years span. Thus, enter the businesses with a long term plan and a mindset that Rome wasn’t built in a day.
In the Textile Industry, margins are less and money is made and earned over time. Here you cannot gain huge margins. Net margins are are quite low. Thus to make a mark in the industry you have to research on market trends, focus on new developments in production and focus on value added products, since these are highly demanding and worth the risk. If we manage these things, the future is bright and we can do business in a good way.
