The textile industry in Ahmedabad experienced a significant setback due to the fluctuating prices of cotton from October to September 2022, as highlighted in a report published by the GujCot Association.
This volatility had an adverse effect not only on mills but also on farmers in the region. The report revealed that the high prices resulted in the lowest Indian raw cotton exports in 15 years, with only 14.66 lakh bales (170kg each) being exported.
Industry experts anticipate that challenging times will persist in the foreseeable future as new arrivals come in. The GujCot report indicated that the prices of Indian cotton remained higher than international rates for a considerable portion of the 2022-23 cotton season, leading to a significant decline in raw cotton exports.
In comparison to the previous years, India exported only 14.66 lakh bales in 2022-23, as opposed to 42 lakh bales in 2021-22 and 77 lakh bales in 2020-21.
Ajay Shah, the GujCot secretary, described the period between November 2022 and May 2023 as a historic battle between cotton farmers and mill owners. During this time, farmers held onto their cotton while mills hesitated to build inventory. Despite the struggle, cotton prices remained relatively stable between Rs 61,000 per candy and Rs 63,000 per candy (356kg), with a slight dip in late December attributed to the NY futures.
The disillusioned cotton farmers eventually decided to sell their produce from May onwards, leading to a downward trend in cotton prices. This selling pressure resulted in prices fluctuating between Rs 56,000 per candy and Rs 60,000 per candy, illustrating the challenges faced by farmers and the market’s response.
In the 2022-23 cotton season, Gujarat witnessed the pressing of approximately 92 lakh bales, which was higher than the 74 lakh bales recorded in 2021-22. The new cotton season has already commenced, with India experiencing a daily arrival of approximately 80,000 bales, of which Gujarat contributes around 25,000 bales per day, according to the GujCot Association.
