The continued rise in cotton prices makes Indian cotton mills “very powerless”
Cotton prices in India have continued to rise in recent weeks, while cotton yarn manufacturers have been unable to raise prices, resulting in a decline in cotton yarn profits.
In the week of July 6-12, the price of S-6 in India increased by 5.6% in rupees and 4.73 cents in US dollars. In the past four weeks, cotton prices in India have increased by 10-15%, which is 30-35% higher than three months ago.
Affected by the sharp rise in cotton prices, textile mills, especially those in the south, import a large amount of foreign cotton. However, the imported varieties are mainly African cotton, and its high impurity content also affects the quality of the yarn.
According to statistics, since the beginning of this year, Indian cotton prices have increased by approximately 30%, ICE cotton futures have increased by 12%, Pakistani cotton prices have increased by 10%, and Chinese cotton prices have increased by 4%. It is reported that the sharp rise in cotton prices in India is mainly due to Pakistan’s large imports of Indian cotton, which has led to tight cotton supply in India. Judging from the current situation, Pakistan’s cotton output next year is still not optimistic, and whether India’s cotton prices can recover is still unknown.
At present, Indian yarn mills are trying to increase their quotations, but the increase in cotton prices has prevented them from passing on the costs to downstream buyers, and cotton yarn exports have almost stagnated. In the past week, the price of 100% pure cotton yarn in India has increased by 15 cents, or 5.4%, and has increased by 28 cents, or 10.5%, in the past four weeks. The British rating agency ICRA reported that Indian cotton prices are higher than international cotton prices, which has led to a setback in domestic and foreign demand for Indian cotton yarn. Therefore, India’s spinning profits in the second quarter of the 2016/17 fiscal year may be affected. The continued rise in cotton prices makes Indian cotton mills “very powerless”
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