cotton industry | COTTON PRICE

Cotton prices have forced the Indian textile sector to switch to MMF.

Published: April 28, 2023

The entire textile value chain in Gujarat, India, is switching over to less expensive fibres like viscose and polyester as a result of the growing price of cotton. Though it won’t happen immediately, India’s officials are working hard to shift the industry’s emphasis from cotton to man-made fibres (MMF). The industry has shifted to less expensive fibres as a result of the current market conditions and the seasonal change in output.

However, there have been incidents of customers rejecting goods because cheaper fibres were secretly mixed in. This suggests that it might take longer for downstream businesses and end consumers to adopt this new normal.

In India, cotton prices last year hit a record high of more over 1,11,000 per sweet weighing 356 kg. Nevertheless, the downstream sectorwas experiencing a lot better situation as a result of price parity with the global market. At 62,000 per candy, cotton prices are currently hanging at about half of that. The rising price of cotton, however, is creating challenges for Indian exports of cotton yarn, fabric, and apparel. The cost of natural fibre has been higher than ICE cotton since the start of the current cotton selling season in October 2022.

Industry sources claim that spinners are currently operating production at a loss or with no margins, which forces them to restrict their output. While cotton prices have stayed high all season, prices for yarn, fabric, and clothing have not changed substantially. As a result, Indian exporters must contend withhigher expensive cotton.

When they get orders for the upcoming winter season, power looms and garment factories typically transition their production from cotton to man-made or blended fibres. To escape the high price of cotton, these units have been compelled to switch over earlier than usual.

According to a market source from Ahmadabad, cotton fabric costs between 80 and 90 rupees per metre, while ordinary quality grey blended textiles are sold for between 70 and 80 rupees per metre. This pricing discrepancy could increase by as much as 40%.

Cotton costs are so high that the sector must move away from it in favour of less expensive fibres, according to Saurin Parikh, head of the textile committee of the Gujarat Chamber of Commerce and sector (GCCI). Gujarat and India are just two examples, yet it isnow a worldwide craze. He explained that because Gujarat’s textile industry is more dependent on cotton fibre, the state is seeing a greater transition towards less expensive fibres. Parikh acknowledged that the tendency is partially a result of the seasonal change because man-made fibre is more popular in the winter.

Cotton has certain qualities that cannot be matched by synthetic fibres, such as its smooth touch and ability to absorb sweat. Between April and June of every year, major international companies place bulk orders for the upcoming winter season, which is when the industry normally switches from cotton to man-made fibres. However, this year’s change was accelerated by the high price of cotton.

Former Southern Gujarat President Ashish Gujarati”Cotton prices are so high that it is unprofitable for the industry to sustain itself by using the natural fibre,” the Chamber of Commerce and Industry (SGCCI) told F2F. The downstream industry is being compelled to switch to less expensive fibres in order to survive the current difficult situation.

The apparel business and end customers, however, may need some time to adjust to the sector’s shift towards less expensive fibres. According to sources, the disclosed blending of less expensive fibres occasionally exceeds the permitted limit, leading to disagreements between buyers and sellers.

India is largely a cotton-focused textile hub, and as a result of its distinct characteristics, it will continue to hold its position in the industry even though use of man-made fibres may rise.

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