The surging rates of cotton, in combination with a shortage as the crop size is smaller than what had been projected due to the monsoon’s failure in several growing areas, have forced Tamil Nadu-based spinning mills to look at imports to meet their production requirements.
However, with the current fluctuations in international cotton prices, the spinning mills are adopting “a wait and watch” approach in anticipation of a further softening of prices, the Coimbatore Cotton Association told the Hindu Business Line.
Because of the shortfall, the association pointed out that cotton prices have gone up to Rs 47,000-48,000 per candy of 356 kg, forcing spinning mills to go for imports, which are cheaper.
The initial projection by the Cotton Association of India was 360-370 lakh bales, but this has come down to around 320 lakh bales in the current marketing season, which commenced in October 2018 and will continue till September.
While Indian mills started importing cotton at 80-87 cents per pound (1 pound = 0.45 kg) , international prices have started moving northwards. If there is a price drop, there will be more buying by the mills, the association said.