Cotton, a basic raw material for textile products, is increasingly getting scarce. The excessive increase in the raw cotton prices has shaken the textile sector. All the sectors of textile are hit badly. Prices are soaring, especially in India, China and Pakistan. China has seen an unexpected surge in future contracts. China is expecting a reduction in cotton crop by 10% in the current year.
There is an urgent need to strike a balance between the quantities allowed to be exported and that which is consumed by the yarn manufacturers in the country. Indian government may consider restricting export up to 400,000 bales per month while allowing maximum exports of 50,000,00 bales annually. This will help in ensuring a sufficient supply to the consumers in India. There are industrialists who are lobbying with government to ban exports of raw cotton to help local industry.
This rise in raw cotton price is making the survival of value added textile products difficult. Due to the rise in raw cotton prices, rates of cotton yarn have gone up by 30%. This has brought cotton blended yarns back in demand. Costly raw cotton has made life difficult for many small spinning mills. Their raw material costs have gone up and those who are not financially sound may be facing closure. Many of these small spinning mills supply to small weaving and knitting factories which produce fabrics for the garment sector. Their closure may result in short supply to the garment, and made-up sector.
This will also lead to unemployment as textile sector, all put together, is one of the biggest employer in India. Its high time government should do something and find a quick solution to this problem.
Source by Nalini Priyadarshni