The steep hike in cotton prices, by about Rs. 6,000 a candy, in the last few weeks is a matter of concern to the textile industry, for which cotton is the main raw material. According to data obtained from sources in the trade, cotton price (Shankar – 6 variety) is now Rs. 39,600 a candy compared to Rs 34,300 in April and Rs. 34,000 in January this year. Prior to that it has been fairly stable in the Rs 32,000 to Rs. 34, 000 range between January and In January last year, the price was Rs. 32,000 a candy, reports the Hindu. This has hit the acquisition prices for textile mills that do not have stock of the raw material. The mill gate price is more than Rs. 40,000 a candy. This is an abnormal increase, said C. Varatharajan, president of the South India Spinners’ Association.However, sources in the Ministry of Textiles are not worried. “There is sufficient availability of cotton. Both imports and exports are at the expected levels. Prices also depend on market sentiments,” said a senior official in the Ministry of Textiles. At its meeting in February, the Cotton Advisory Board estimated imports to be 11 lakh bales and exports to be 70 lakh bales this year. However, according to the textile industry, imports are likely to be more than the estimates as international cotton prices are lower than the Indian prices. Domestic production might also be less than the expected 352 lakh bales. Sources say that prices will come down once the rains start in the cotton cultivating areas. Prices have gone up mainly because of the delay in the arrival of the monsoon and reports that cotton production next season might be lower than in this year. “We have asked the textile mills not to panic. But, the Government should create a stability fund to help mills buy cotton during the peak season,” said M. Senthil Kumar, chairman of Southern India Mills’ Association. Price pressures The mills, sources said, felt the price pressure in cotton last year only during July-August. This year, it has started early, they said. The Government should clearly indicate the cotton position so that there is no speculation in prices, says Prabhu Damodaran, secretary of Indian Texpreneurs Federation.
