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Industry sources foresee a comfortable cotton position during the 2017-18 cotton season.
The Southern India Mills Association (SIMA) is estimating the crop at 370 to 380-lakh bales of 170 kg each. “While the crop position is comfortable, mills are not working at their optimal capacity as there is a huge accumulation of yarn. In fact, many of the spinning mills in the south have resorted to a “go slow” tactics.
A good number of mills are facing heavy cash crunch. This is worrisome” said K Selvaraju, the Secretary General of SIMA.
Yarn productionHe however maintained that the yarn production had stagnated at around 4,000-million kg level since 2014-15, despite the increase of over 3 million spindles in the last three years. “Declining demand for the yarn has driven quite a number of small weaving units out of business,” he added. Meanwhile, the Ministry of Agriculture has confirmed that the area under cotton in 2017-18 season has jumped to 119.88-lakh hectares from 101.72-lakh hectares in the earlier season. Trade sources say the crop has continued to draw significant rainfall in areas that were deficient, and this in turn could improve the crop position.
“Arrivals, though, could be delayed due to rains,” the source said. Cotton arrivals peak by the end of September in north compared to the central and south cotton zone.”
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