Impact Of Sudden Fall In Cotton Prices On Textile Sector

21 July 2022, Mumbai:

Manufacturing textiles rely heavily on cotton. As a result of declining cotton prices, which also impact yarn costs, and weakening demand from fabric producers, the textile sector is currently in a slump.

Cotton prices, which had been rising over the past six months, have suddenly reversed course and are now down 20%. Cotton's price fall has had a similar impact on yarn costs. The textile industry has reacted to this in a variety of ways.

While some industry players feel the heat, others believe their businesses will profit. They think that cotton price declines would increase profit margins for firms involved in the whole value chain.  

According to S P Oswal, Chairman of the Oswal Group, in Business Standard: "The Union Government's two and a half month ban on yarn exports had a disastrous effect on the industry. The spinning industry was forced to deal with the stock made from cotton purchased at a significantly higher price ".

Prices have been impacted by market rumors regarding the arrival of massive amounts of cotton. The prices are also being affected by the conclusion of the cotton season and the introduction of low-quality cotton to the market.

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