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Textile Mills Advised Against Panic Buying As Cotton Prices Spike

Updated: Mar 02, 2024 12:43:32pm

Textile Mills Advised Against Panic Buying As Cotton Prices Spike

Coimbatore, Mar 2 (KNN) The Southern India Mills’ Association (SIMA) has issued a plea to textile mills across southern states, advising against rash cotton purchases driven by panic.

According to S.K. Sundararaman, Chairman of SIMA, recent weeks have seen domestic cotton prices surge by 10 per cent to 12 per cent, with the widely used Shankar-6 variety reaching nearly Rs 62,000 per candy, up from Rs 55,300 just two weeks prior.

The Committee on Cotton Production and Consumption forecasts current season's cotton production at 316.57 lakh bales, with imports at 12 lakh bales and domestic consumption at 310 lakh bales.

Meanwhile, mill capacity utilisation has risen to 80-90 per cent, with approximately 20 lakh bales already contracted for export. However, Sundararaman notes that export demand may dwindle as domestic cotton prices edge closer to international levels.

Internationally, the cotton market appears stable, with expectations of increased global availability post-July, fuelled by heightened production in Australia, Brazil, and other nations.

The Intercontinental Exchange (ICE) cotton futures are anticipated to undergo a significant inverse trend post-July 2024, potentially easing Indian domestic cotton prices.

Given this scenario, SIMA advises spinning mills to abstain from panic buying, emphasising the comfortable cotton supply situation both domestically and globally. Sundararaman urges mills to disregard rumours and exercise prudence in cotton procurement decisions.

(KNN Bureau)


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