Ahmedabad Textile Industry Faces Hurdles Amid Cotton Price Volatility

Ahmedabad, Jan 29 (KNN) The decline in cotton prices has led to a surge in orders for the textile industry in recent times, providing a favourable market environment.

However, challenges have surfaced for earlier orders placed when cotton prices were higher, causing complications at the delivery stage, reported TOI.

Approximately 350 containers containing various textile products, including denim and spinning waste, are currently stranded in different countries, as per sources.

Buyers are seeking discounts due to the decrease in cotton prices, contributing to the delays. Payment issues experienced by buyers are another factor behind the shipment deadlock.

A representative from the Spinners’ Association Gujarat (SAG) highlighted the predicament, stating that different types of spinning waste, utilised in some countries for denim, carpet, and terry towels, have reached various destinations.

“However, approximately 250 containers of such waste, including around 100-150 from Gujarat, have reached different countries but buyers are not taking delivery due to various reasons. Containers going to Vietnam have been facing major issues in the last few months,” the association representative noted.

In October, during the initiation of India's new cotton season, cotton prices stood at Rs 60,000 per candy (356kg). They have since stabilised around Rs 55,000 per candy.

This price stability has positively impacted export orders and domestic market demand since December, elevating spinning mill capacities in the state to approximately 80 per cent.

Despite the improvement in export orders due to the reduction in cotton prices, buyers for completed orders are requesting discounts before accepting delivery, according to the SAG representative.

A prominent denim manufacturer and exporter from Ahmedabad highlighted the challenges faced by the denim sector, particularly concerning shipments to some African countries.

Payment issues have arisen, leading to buyers withholding acceptance, impacting working capital. Around 100 containers of denim from Gujarat have encountered such challenges in various countries in recent months.

The exporter calls for government intervention to establish a mechanism and agency to provide legal assistance to exporters when foreign buyers refuse delivery, citing discounts due to price changes.

(KNN Bureau)