The Southern Indian Mills’ Association (SIMA) hopes that rapidly increasing price of Indian cotton and yarn will be reduced in December to February period. With that cotton and yarn prices will calm in post-Diwali.
As by the end of November, majority of cotton will arrive, which will put a brake on prices in December to February. SIMA urged the spinners to evade panic buying.
The surplus demands thrown open by the global and domestic markets in the outcome of COVID second wave and the govt. remove the 10 percent import duty levied on cotton has added fuel to the situation in India.
The Indian govt. also, direct CCI to build strategic stock for price stability with sufficient government funding directing them to sell such cotton only to the spinning mills.
Considering the grave situation of the market scenario, SIMA convened an urgent virtual meeting of its members today and had detailed deliberations on the issues and decided to advise the stakeholders to avoid panic buying of cotton and yarn at a higher price for a longer period.
The global cotton scenario has been facing an unprecedented challenge as the international price has been increasing exponentially since the beginning of September 2021. And the international cotton dealers are taking full benefit of the current cotton scenario and speculating the prices.
Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA), has stated that though the entire cotton textile value chain started performing extremely well in recent years, the skyrocketing of cotton prices has created a panic situation in the country.
He has said that the continuous increase in the cotton prices and consequently the yarn prices is causing havoc for the exporters to meet their long-term commitments.
He has added that with continuing uncertainties, the exporters are finding it difficult to confirm long-term orders.
SIMA Chairman has stated that the anticipated bulk arrival of cotton in the post-Diwali would certainly force the market to reduce the cotton price that would have an impact on yarn price. He has said that such a drop in cotton and yarn prices and stability of the same could be seen only when the industry avoids panic buying of cotton and yarn for the next 15 to 20 days.
He has advised the spinning mills to be very cautious and extend full cooperation to the downstream sectors so that the country could continue to get the increased demand opportunities thrown by both domestic and international markets.
He has stated that the industry could mitigate such precarious situations from December 2020 to March 2021 by standing united. He has appealed to the downstream sector and the spinning sector to extend similar cooperation to enable the industry to alleviate the present challenge and tide over the crisis.
