cotton industry

Cotton prices have confounded the ginning and spinning industries.

Published: August 4, 2023

Gujarat’s growing spinning industry is being impacted by the volatility in cotton prices. Many ginning and spinning operations are experiencing losses for the second year in a row as a result of Indian cotton yarn prices lingering higher than global levels for the majority of the season.

Prices are anticipated to cease growing further after the new harvest arrives in the northern regions in August. Many spinning mills with poor financial results, it seems, are seeing a change in partnership.

Due to a lack of demand and realisation, more than 50% of the spinning mills in South India have stopped operating, and the market for yarn is still weak.

With a total installed capacity of more than 45 lakh spindles, Gujarat has about 120 spinning mills, the majority of which are located in Saurashtra. The vice president of the Spinners’ Association Gujarat (SAG), Jayesh Patel, stated that both the previous and current seasons have been challenging for the spinning industry. For the majority of the year, Indian cotton prices have stayed higher than those of other countries, making spinning mills uncompetitive suppliers of yarn on the global market. Additionally, domestic demand has been poor, and the spinning industry has experienced losses for the second year running. We anticipate that the northern states’ new crop arrival will begin in August, preventing a rapid increase in cotton prices.

Price changes have also resulted in losses for ginners. “Cotton prices were up when the season started last year and then saw a reduction,” said Apurva Shah, secretary of the Gujarat Chamber of Commerce and Industry (GCCI). The ginning units had made expensive acquisitions. Currently, the cost per kilogramme of candy (356 kg) is about Rs 58,000, compared to an average purchasing cost of Rs 63,000.

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