Cotton spinning industry growth expected to reach 8 percent

18-Jul-2024 03:25 PM

Mumbai. A leading rating agency has estimated the growth rate of the Indian cotton spinning industry to be between 6 to 8 percent during the financial year 2024-25.

According to the agency, after the decline in the last two years, the growth rate of the industry is expected to be positive this time. In fact, the performance of the industry was not good due to weak domestic demand and decline in export of cotton yarn.

The spinning industry will get relief due to increase of 4 to 6 percent in production during the current year and some improvement in yarn prices.

It is worth noting that most of the cotton produced in India is used in the domestic sector and now there are signs of good recovery in the garment and home textile sector.

Although its exports increased somewhat during the financial year 2023-24 and it is expected to continue in the financial year 2024-25, but global demand has started weakening somewhat.

It will be necessary to see how competitive the price of Indian cotton yarn and textile products is compared to other exporting countries. This can help in increasing exports.

It is necessary to attract importers. During the financial year 2022-23, the domestic market price of cotton jumped to an all-time high, but after that a period of softening started and it fell by 26 percent in the year 2023-24.

One reason for this is believed to be softening of prices in the global market and the other reason is the decrease in domestic and export demand.

Some improvement in the price of cotton is expected during the current year as its demand is increasing while the area under cotton cultivation is likely to decline.

The acreage in the northern region has already decreased considerably. As far as cotton yarn is concerned, its prices have been softening since June 2022.

Its prices are expected to improve in the financial year 2024-25, but this improvement will actually depend on the increase in its demand.