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India'S Cotton Prices Rose 6% In July

2021/7/29 18:43:00 0

Foreign news on July 28, the textile industry association of South India (SIMA) said that the sharp rise in cotton prices in India's domestic market made India's textile exports lose competitiveness. As cotton prices in the domestic market rose by 6% in July, Sima asked for the cancellation of 10% import tariffs“ Due to the blockade, shortage of workers and high logistics costs, downstream export sectors, clothing and cosmetics sectors found it difficult to meet their export commitments.

In this case, the sharp rise in cotton prices in India has further destabilized the industry and made our exporters uncompetitive. Cotton India (CCI) recently raised the price of 3800 rupees / 355kg in 15 days, and the 10% import tariff on cotton in the 2021-22 budget has led to an abnormal rise in cotton trade prices, and this trend continues.

Such a substantial increase is a serious blow to the whole cotton textile value chain. " "Cotton prices have risen rapidly since January 2021 and jumped this month," said Ashwin chandran, President of the association“ CCI has raised cotton prices since early July, boosting the market. In January 2021, the market price of sankar-6 cotton produced in Gujarat was 43300 rupees. Now it has risen to 56600 rupees, an increase of more than 30%.

Chandran pointed out that the sharp rise in cotton prices will not only affect the cotton industry and squeeze the profit margin, but also lead to the increase of clothing and textile prices of domestic consumers, who have been negatively affected by the new crown epidemic.

“ There is no parity between cotton and yarn at present. This in turn will force spinning mills to raise yarn prices for some time to avoid losses. CCI purchased more than 25% of India's Cotton under the lowest support price operation.

The purchase cost per 355kg will reach 43000 rupees. The current price is abnormally high.

Even considering the cost of holding and reasonable profit margin, CCI can maintain the price at about 48000 rupees. Although CCI provides a three-month lock-in period for bulk purchases, most spinning mills are unable to benefit from tight liquidity and price uncertainty, and multinational Cotton Traders can take full advantage of hedging tools and cheaper funds.

They buy a lot of CCI cotton at a lower price. " Chandran said“ By imposing a 10% import tariff on cotton, trade has encouraged price speculation. The domestic price of some varieties, such as els cotton, has exceeded the international price, making our industry uncompetitive. "

"Removing the 10% import tariff on cotton will help to change market sentiment and avoid further damage to the cotton textile value chain," said chaindran. As the industry imports only about 1.1-1.2 million rupees per year (less than 4% of the annual consumption) and imports cotton varieties that are not grown in India, import tariffs have not helped Indian cotton farmers and become a major obstacle to India's textile and clothing industry. " 　