High cotton prices to spoil apparel stocks' outlook in near-term: Analysts

At the bourses, shares of textile stocks like KPR Mills, Welspun India, and Vardhman Textiles have tumbled up to 45 per cent so far this year.

Extreme weather conditions, coupled with lower crop yield, have triggered a sharp rise in cotton prices. So far, in the month of August, the prices of this commodity have surged over 11 per cent to Rs 50,600 per bale from Rs 45,297 earlier.

Domestic spinning mills have either trimmed production or have started to use existing inventories to meet domestic demand. This is due to higher yarn prices, pest infestation and excessive rainfall patterns.

The highest cotton-producing states like Gujarat, Tamil Nadu, Andhra Pradesh and Maharashtra have lowered or ceased their production due to low demand and elevated commodity inflation.