“Avoid Panic Cotton Buying” – SIMA Advises Spinning Mills
Following a steep increase in cotton prices, particularly the Shankar-6 variety in the last two weeks, the Southern India Mills’ Association (SIMA) advised spinning mills to avoid panic buying.
According to Dr SK Sundararaman, Chairman, SIMA, cotton prices have increased by 10-12 percent within 15 days and created a panic situation across the textile value chain.
He stated that cotton price for Shankar-6 variety was ruling at Rs 55,300 per candy of 356 kg each and fluctuating by few hundred rupees daily, but has now increased to Rs 62,000 per candy.
Dr Sundararaman strongly advised spinning mills to avoid panic buying, as the cotton supply position looks comfortable.
The Committee on Cotton Production and Consumption (CoCPC) has estimated crop size at 316.57 lakh bales, imports at 12 lakh bales, consumption 310 lakh bales, exports 25 lakh bales and closing stock at 57.65 lakh bales for the 2023-24 season.
He pointed out that cotton export demand will come down as the cotton price is fast approaching the global price and so, the estimated closing stock, which is one of the highest would ensure adequate availability of cotton.
SIMA Chief informed that around 215 lakh bales of cotton have arrived in the market till February 2024 and arrival per day continues to average more than a lakh bales.
He mentioned that as a significant portion of good quality cotton of this season has arrived in the market, the steep increase in price will only benefit the trade and not the farmers.
Taking into consideration the global cotton scenario, he further said that global cotton availability is expected to be higher post July 2024 due to higher output in Australia, Brazil and other countries.
“Global cotton supply position and the stock-to-use ratios are also comfortable in most of the cotton consuming countries,” Dr Sundararaman mentioned.
So, he advised textile and spinning mills to ignore the rumours and exercise extreme caution while procuring cotton.
