With cotton prices on a decline, textile mills are waiting for the prices to stabilise to revive production.
Several textile mills that use cotton as raw material are operating at less than 50 % capacity at present because cotton prices went up to nearly ₹ 1 lakh a candy and are at nearly ₹ 70,000 a candy now (for Shankar 6 variety).
Ravi Sam, chairman of Southern India Mills’ Association, said there are several uncertainties that the mills are facing. Yarn movement is still slow and some mills have stocks too. The mills are not sure of the price trend for yarn and export demand. “Let us hope things improve in November with better demand, especially international demand,” he said.
Prabhu Dhamodharan, convenor of Indian Texpreneurs Federation, said cotton prices are expected to stabilise at ₹ 60,00 to ₹ 65,000 a candy. Cotton consumption is low now as the prices are yet to stabilise and the mills do not want to buy the raw material at this juncture. The mills have started calibrating operations and many have started going in for blended yarn. Demand for cotton has,thus, reduced. “I expect the demand to remain low for another month and when the cotton prices stabilise, the mills will revive production,” he said.
According to a small-scale spinner here, the market has revived and the festival season sales are expected to be good this year. This will result in higher demand for raw materials across the textile supply chain. Though production at textile mills is low now, it will pick up in a month or two, the spinner said.