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  • ICC Demystifies Cotton Industry For Spinners & Garment manufacturers

    Published on January 21, 2022

    Industry Experts shared their observations at a panel discussion by the Indian Chamber of Commerce

    The Indian Chamber of Commerce (ICC), one of the leading national chambers of India, organized a panel discussion to talk through the affairs related to Cotton & Yarn Supply, Prices and other related issues which have seriously impacted business of the entire value chain over the last one year and what are the expectations and future business trends. The session was moderated by Mr. Sanjay K. Jain Chairman, ICC National Expert Committee on Textiles & MD, T T Limited. Key industry experts like Mr. Neeraj Jain, Jt. Managing Director, Vardhman Textiles Ltd, Mr. Atul Ganatra, President, Cotton Association of India, Mr. Dharmendra Goyal, Managing Director, Shreedhar Cotsyn Pvt Ltd, Mr. Unupom Kausik, Sr. Vice President, Olam International Group consisted the panel whose share of experience enlightened the audience.

    To set the context for the session, Mr. Sanjay K. Jain Chairman, ICC National Expert Committee on Textiles & MD, T T Limited started with the current garment scenario on how the industry is constantly on a roller coaster ride with the prices and demand.  He questioned the panel on things like expectation of demand of cotton and yarn in domestic and international markets,  asked for possible suggestions for the end users and how removal of import duty is likely to benefit the spinners and garment owners. He also stressed that a lot of steps had been taken on man-made fibres by the government. The anti-dumping is duty had been removed and PLI (production-linked incentive) scheme  introduced for large scale projects.

    Mr. Neeraj Jain, Jt. Managing Director, Vardhman Textiles Ltd said that cotton demand was currently good but the rise in demand could drop and the same might be substituted by polyester and synthetic fibre. In both domestic and international markets Polyester Cotton had been introduced and shift was observed. He estimated a demand in cotton consumption at 33 million bails in the coming year. The cotton consumption would be more inclined towards synthetic part. He also advised the end users to keep a check on ICE (Intercontinental Exchange) indicator for indicative prices.

    Mr. Atul Ganatra, President, Cotton Association of India said that there were reasons for cotton prices going up. The first reason was that the spinning mills which were huge profit makers by converting cotton into yarn had now reduced. The profit of spinning mills had been diverted to farmers and to stockists. The second reason was the farmers being the biggest stockists were selling very slowly. The third reason was ICE prices going up. He also shared an interesting insight that many spinners were buying viscous with the cotton and mixing with cotton yarn. Many spinners in South were shifting to Polyester Cotton Yarn. He expected 25 lakh – 30 lakh bails to be imported if duty was removed especially in the South where the large buyers had already stocked the cotton. He also expected the Import Duty to be removed. He further advised his end users to go slow as this was a dangerous time and prices were fluctuating.  The situation was extremely challenging and with the new directives from the government, cotton could become one of the essential commodities.

    Mr. Unupom Kausik, Sr. Vice President, Olam International Group said that the overall scenario globally had triggered due to a significant reduction in marginal production and increase in marginal demand, reduction in supply of products. The constraint created by China created imbalances in exporting deflation in textile. Cotton was well supplied but not well available. He mentioned that the crisis was across the globe. There was no basic shortage with availability of cotton and in few months’ time things would level up. He also said a major respite was expected if import duty could be removed.  He highlighted that it was an opportunity for India to take aggressive steps and grab its leadership position in cotton as China was slowly vacating the position.

    Mr. Dharmendra Goyal, Managing Director, Shreedhar Cotsyn Pvt Ltd shared a picture of the last quarter. He stated that until November export figures were in consistent pace and by end of December Chinese order was executed and we had to feed from other markets. The current prices were extremely challenging and creating pressure on mills. The exports would come down by 15- 20% in the next quarter.

    The discussion ended with a Q & A session and a thanking note by the moderator.

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