Apparel Online India Magazine May 1-15, 2019 | Page 26

TEX-FILE HAVE YOUR SAY BREAKING NEWS Tell us your news by emailing at [email protected] To read the latest sustainability news, go to https://apparelresources.com/business-news/sustainability/  Cotton production to be worse in 12 years; CITI claims ‘situation under control' Despite speculations that the cotton yield will be the worst in 12 years, the industry feels that there will be no shortage of the same with price also not becoming an issue. Due to various factors, cotton prices are likely to remain steady and range bound. The Cotton Advisory Board (CAB), had estimated the cotton crop to be 361 lakh bales on 22nd November 2018. However subsequently based on the arrivals and crop situation, Confederation of Indian Textile Industry (CITI) feels that the cotton crop may go as low as 343 lakh bales. It added that drought in many cotton growing regions of Gujarat, some regions of Maharashtra and a few areas in other such states had affected the cotton yield. However, CITI assured that the situation is under control. “India has a smaller crop size this year in comparison to last year, the cotton supply position is very comfortable with a big ending stock of 40 lakh bales. But thanks to a big opening stock, smaller exports and large imports, the production deficit is well covered. CCI has also started selling its stock, which will further increase liquidity in the cotton market,” said Sanjay K Jain, Chairman, CITI. The industry feels that there is a great amount of uncertainty regarding the estimation of cotton crop situation in the country causing much hardship for the value- added textile industry, especially for the spinning segment. There are rumours doing the rounds in mainstream media indicating a very low crop estimation which is creating chaos in the market and prompting people to stock cotton in anticipation. As far as price is concerned, prices were high during the start of the 26 Apparel Online India | season, but later fell by 10% due to good availability of cotton in the market. The fall was limited due to the high MSP levels that gave confidence to stockists that market cannot fall beyond a point. Also hopes of China-US trade disputes settling down soon, have led to the sudden spurt in prices despite an appreciating rupee. This rise has been partly supported by the increase in international prices, however, Indian prices have increased much more (12% in just over a month) which is due to the news floating around that India will be severely short of cotton. CITI is fully confident that India will have no shortage of cotton in 2018-19 despite an all-time low yield. As far as crop situation for next year is concerned, the highly remunerative cotton prices during the current year and the monsoon projection would induce the Indian farmers to prefer to grow more cotton. International Cotton Advisory Committee (ICAC), the apex organisation of cotton, in its report for April 2019 MAY 1-15, 2019 | www.apparelresources.com NO COMPETITION AT GLOBAL LEVEL… Experts feel that India’s cotton shipments have become uncompetitive in global markets as prices of select cotton varieties are jumping higher. India is losing its hold on cotton export market to Brazil due to a sharp increase in the fibre prices. The appreciating rupee has made actual realisation lower than the depreciating Brazilian real… China, the largest importer of Indian cotton, has started importing cotton from Brazil as it has become a cheaper substitute. has projected an increase of 6% in global production for 2019-20 at 27.6 million tonnes. It also projected a higher ending stock for 2019-20. Due to these factors, cotton prices are likely to remain steady and range bound. Early monsoon and import arrivals in India may create downward pressure on cotton prices from June 2019. Technical sector in Gujarat registers 10-fold increase in investments Technical textiles, known to be the sunshine segment for the textile industry, has shown an impressive growth over the past five years in Gujarat as investment increased by 10-fold during the period. By the end of financial year 2013-14, there were only 17 technical textile units registered with the state industries department and investment in the area was hardly Rs. 156 crore. The number of these registered units went up to 181 within five years and as on March 31, 2019, the total investment in the segment was pegged at Rs. 1,775 crore. “The investment in the segment must be more than the official figure. The State Government has the data of only those units which have taken some benefits under the textile policy floated for the period 2012 to 2017. A specific credit-linked interest subsidy scheme offered under the policy to set up a technical textile unit encouraged entrepreneurs. Some of them were already having traditional textile units in the state,” said a senior officer in the state industries department. According to the data, maximum investment of around Rs. 475 crore came during the financial year 2016-17. In the same year, as many as 51 new units were set up across Gujarat, especially in Ahmedabad and Surat regions which are considered as major textile hubs in the country. During the recently concluded fiscal 2018-19, 32 new technical textile units were set up in the state with an approximate investment of Rs. 370 crore.