Spinning mills have become cautious while buying cotton

16-Jul-2024 02:25 PM

Coimbatore. Spinning units are now showing a lot of caution in buying cotton because its current marketing season is going to end soon and good sowing is being done for the next new crop.

According to the Union Agriculture Ministry, the sowing area of ​​cotton at the national level has increased from 93.02 lakh hectares last year to 95.79 lakh hectares this time, while its sowing is still going on in many states.

Spinning units are now hesitant to buy cotton at a higher level, its new marketing season is going to start from October, in which only two and a half months are left. 

The convener of India Tex Price Federation says that overall the liquidity (money flow) situation in the market is not good, so spinning units are being cautious in buying cotton.

The increasing popularity of man-made and cellulosic fibers is also helping the mills to reduce the use of cotton. 

Government agency- Cotton Corporation of India (CCI) has a stock of more than 20 lakh bales of cotton which was purchased from farmers at the minimum support price during the current marketing season.

On one hand, the demand for cotton in textile mills remains weak, on the other hand the corporation is showing haste in selling its stock.

This is likely to increase pressure on the price of cotton. The Vice President of All India Cotton Brokers Association says that if the trader buys cotton from CCI and then sells it to the mills on credit, then it will not prove to be a profitable business, so they are also sitting quiet.

The demand for cotton yarn has weakened and prices are also witnessing a decline, which has increased the difficulty of the textile industry. It seems difficult for cotton prices to rise much for some time.