The Cotton Yarn Advisory Board has projected a surplus of 845 million kg of cotton yarn next fiscal.
At a meeting on Saturday, the board made the projection based on the Cotton Advisory Board's expectation of area under cotton increasing to 112 lakh hectares next season from 111 lakh hectares. The mark up in yarn exportable surplus comes on the heels of the 37 per cent increase in cotton production to 312 lakh bales of 170 kg each (295 lakh bales) this season ending September.
Big boost
“The decision will give a big boost to yarn manufacturers as they have added about three million spindles, an increase of 12 per cent in the last one year,” said a company official, who was privy to the board meeting.
Given the confusion over cotton and yarn exports this fiscal, the Government may, for the first time, consider fixing monthly quota to calibrate exports, he said.
YARN PRICE RISE
In line with cotton, yarn prices have gone up by 10 per cent in the last two months, depressing domestic demand.
Cotton prices increased to Rs 60,000 a candy (of 356 kg)from Rs 42,000 in last two months before stabilising around 58,000.
Garment makers have demanded a curb on yarn exports. Left with a huge inventory, mills have been waiting for the Government's decision on exports.
“It is certainly a breather for the industry. Inventory at the spinning mills would ease a bit as it was earlier expected to carry an inventory of 178 million kg due to high production, low domestic consumption and export freeze. The opening stock for this fiscal was 86 million kg,” he said.