Economy

Textile products prices have gained traction in October: Ind-Ra

Our Bureau Mumbai | Updated on November 12, 2020

Exporters have shut down their production facilities due to the lockdown

The India Ratings and Research (Ind-Ra) in its credit news digest has said that the textile products prices have gained traction in October, with a gradualrecovery in demand on account of the festive season and pandemic unlocking.

While cotton prices continued to gain by 2 per cent to 4 per cent month-on-month in October on account of the demand from the casual wear, knitted and home textile segments. But they were lower by about 5 per cent year-on-year basis, Ind-Ra said.

The rating agency pointed out that with USDA-FAS estimating a steady cotton production for the current season, it would lead to an oversupply in the domestic market, impacting prices further. However, Cotton Corporation of India had taken steps to liquidate its inventory during July-September, which would help in a substantially lower inventory.

Cotton yarn prices continued their recovery in October and remained stronger than blended yarn prices, on account of higher demand from export markets. Also, large cotton spinners who have purchased prior to COVID have written-down inventory losses during Q2FY21, which may have impacted the H1FY21 operating margins. The smaller spinners, having lower cotton inventory and exposure into knitted casual wear reported a stellar performance in Q2FY21 over woven and blended segments, the rating agency added.

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Published on November 12, 2020

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