Production cut looms large in India's cotton spinning sector

Weak demand, sharp increase in production costs hit margins, rising rupee impacts exporters

Cotton spinners in India are considering production cuts during the current financial year to sustain profit margins, which were under pressure due to a sharp increase in the price of cotton over the last few months. Experts estimate an average production cut of 15 per cent for financial year 2017-18, if the current scenario continues.

A recent study by rating agency Care estimates India's cotton yarn production at 3,936 million kg for financial year 2016-17, nearly five per cent lower than 4,138 million kg output reported in the previous financial year. For the past few years, cotton yarn production has increased