Sluggishness in Textile market in Q1: Study

Even as predominantly cotton-based textile industry has performed well during 2013-14, there was sluggishness in the market in the first quarter of this fiscal due to decline in yarn exports to China and also fall in the demand for fabrics and made-up exports to European Countries.
This has resulted in over supply and making yarn prices decrease to the tune of Rs.10 to Rs. 25 per kg, depending on the counts.
However, the garmenting sector had around 15 per cent growth during the current year, when compared to previous years, Southern India Mills Association Chairman T Rajkumar, said in a research study on the market conducted by SIMA.

As the economy in US was fairly doing well and EU has also recovered, the demand for textiles would improve in the coming months, particularly for the coming summer, he said in a release.
Stating that Indian market was normally dull during peak summer and the capacity utilisation in major weaving clusters, particularly Maharashtra and Tamil Nadu, operated 20 to 30 per cent lower capacity, he said delayed monsoon, extended summer till June and advanced Ramzan festival made the powerloom clusters continue to operate at lower capacity utilisation.
The water scarcity also affected the capacity utilisation of wet processing in Gujarat, Maharashtra and other states and the market was expected to pick up any moment as the festivals were fast approaching, Rajkumar said.

The slowdown in the International market and the cotton policy announced by China, during the beginning of the year, had slowed down the export performance of the spinners and weavers in the country, but readymade garments could perform better, when compared to other sectors, Rajkumar claimed.
Though there was a significant drop in the ICE futures prices for December cotton delivery due to anticipated higher cotton crop in US and slowdown in the China imports, it would not reflect in the actual physical cotton delivery for various countries of origin.
As Pakistan was diverting its export to EU taking advantage of 9.6 per cent additional benefit under GSP (Generalised System of Preferences) Plus Agreement, India would have more opportunities in China and other International markets, he said.