Recent volatility in cotton prices has kept the mill sector on an edge for some time now. But industry insiders urge its members “not to panic.”
Stating that the price of the fibre has been on an uptrend due to sentiments in the international market, the President of Indian Cotton Federation (formerly South India Cotton Association) and Managing Director of Rajaratna Mills J Thulasidharan, said the arrivals so far has only been around 265-270 lakh bales (of 170 kg), accounting for roughly around 75 per cent of production.
“Farmers are still holding 25 per cent in anticipation of higher prices. Mills need not panic as yarn demand is showing signs of pick-up and the yarn prices have started to look up. This, coupled with the IMD’s prediction of a favourable monsoon, should improve the market sentiments,” he said.
Industry insiders say that the quality of the cotton, particularly from Northern region has been pretty bad this year. “The level of intentional adulteration is high,” the source said, adding, “mills that were hitherto sourcing the fibre from Gujarat have resorted to Telangana as also import from the African countries.”