Prices start rising as crop suffers heavy damage; mills will press for export bar.
The extended monsoon in most cotton-growing areas is giving sleepless nights to textile houses. The heavy rain in Punjab, Haryana, Maharashtra, coastal Saurashtra and Andhra Pradesh has meant that cotton mills have little stock left to run operations.
With losses due to floods in Pakistan and unfavourable weather in China, the international price of cotton has already touched $1 a pound. This is expected to cast a shadow on India as well.
Domestic textile mills are thus up for challenging times.The price is already around Rs 4,000 per maund in India, about 20 per cent higher than last year.
According R N Viswanathan, the secretary of the South India Cotton Association: “The projected output of 32.5 million bales (each 170 kg) may not be met as the monsoon is still on.”
He said Andhra Pradesh, earlier expected to produce 6.2 million bales, was most likely to miss the target as weather had affected the growth of the flower and waterlogged fields had restrained timely plucking.
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He added pest infestation was also possible once the monsoon was over. “The exact drop in yield can be assessed only after water is drained out of the fields,” he said.
Only Madhya Pradesh has seen withdrawal of the monsoon. But the state is projected to contribute only 1.7 million bales as against the sizeable expectations from Gujarat (9.8 mn), Maharashtra (5.5 mn), Punjab and Haryana (4.8 mn.
Vardhman, the integrated textile company with operations in Punjab, Himachal Pradesh and Madhya Pradesh, says rain may not only delay the crop but undermine the quality too. According to an official: “Since cotton flowers are in full bloom, moisture at this stage will yield poor quality cotton.”
At this juncture, Indian textile companies cannot rely on imports, as deliveries from the US take two months. The price variation of about 10 per cent makes imports unviable.
Since the millers need at least a month to create homogeneous cotton (as it is procured from different parts of the country), they are already lagging.
The textile mills associations have given their feedback to the textile ministry ahead of a scheduled meeting on September 27 to discuss their demand for restricting cotton exports. A senior member of the Northern India Textile Mills Association said, “Rainfall is in everybody’s notice, so there is no need to give a revised feedback.”