Varying cotton estimates put mills in quandary.

At a time when the capacity utilisation levels of textile spinning mills have been reduced to well below 40 per cent, the speculation about cotton crop estimate appears to have aggravated the situation. The lower capacity utilisation is primarily due to two reasons — poor off-take of yarn and labour shortage. “Investment bankers and traders have started speculating on the price front, while ginners are holding on to huge inventory of high-priced cotton. This is good neither for farmers nor for the industry,” said an industry insider. Stating that the cotton situation is good globally, J Thulasidharan, Managing Director of Coimbatore-based Rajaratna Group of Mills, said: “In India, there has been a slight shift to use of man-made fibre. Consumption of cotton, therefore, is expected to be less, apart from the drastic cut in the utilisation levels by many mills.”