The spinning mills of Punjab which were severely hit by the global financial meltdown are now gearing up to utilise higher capacities as the green shoots of recovery are visible in the international market.
Due to high offtake of cotton in Punjab, it is being sold at an all time price of Rs 3,300 per quintal to Rs 3,350 per quintal against the minimum support price of Rs 2,800 per quintal.
Sanguine over the pouring orders from the overseas buyers, Director of Winsome Industries Ashish Bagrodia said that they exported over 90 per cent of the yarn in the international market and rest was picked up by the garment manufacturers catering to the global market. Due to low sentiments last year, the demand dipped abysmally and business was badly hit.
He expects to utilise higher capacities as there are constant queries from buyers. Commenting upon the input cost (the input cost of cotton was revised by 40 per cent in one go last year) he added that substantial revision of input cost put them in jeopardy as the higher cost could not be passed on to the buyers due to slack demand.
“With the brighter prospects this year we have been able to pass on 30 per cent to 35 per cent of our cost revision to the buyers and it is an encouraging trend,”.Hardyal Singh Cheema of Cheema Spintex, a prominent exporter of yarn from Punjab said, who is also ecstatic over the correction in demand and supply.He apprised that the entire textile cluster of Punjab was a loss due to sagging demand coupled with high cotton price and lower yarn price.
Cheema said the Indian players were likely to get an edge in the world market as there had been a worldwide shortage of cotton this year.
“China and Bangladesh, the leading garment manufacturers, who largely outsource to the developed countries are the net importers of cotton yarn. The overall cotton production has been hit across the world due to the unpredictable weather conditions, so the demand for Indian manufacturers should remain stable.” The textile units of Punjab are also likely to have a rollback of 4 per cent entry tax that was imposed on cotton bought from outside the state. The state cabinet has approved it and the notification is expected by the second week of January.
