Indian Texpreneurs Federation,an apex body of the textile industry, today expressed confidence that cotton prices would come down and the speculative price increase during last week was not sustainable.
Though there are issues in the 'quality of crop' in the current cotton year in a few states, overall there would not be much drop in cotton crop this year, ITF convenor Prabhu Dhamodharan said.
Charging a section of the trade with creating panic to increase prices by spreading specific negative information on cotton crop, Prabhu said 80 per cent of the crop was yet to reach the market.
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"This translates to the tune of nearly three crore bales. This massive supply will balance pricing pressure in the coming weeks," he said, citing ITF field reports.
Dhamodaran said ITF strongly believes that the price increase this week in cotton to the tune of Rs 1,500 per candy would not sustain and was only a short-term speculative increase.
He said ITF has advised members to plan for cotton import for two months of the mills consumption this cotton year to mitigate the risk.
"With our last year import experience, even with Rs 2,000 more cost, mills can get a better cost advantage because of superior quality of imported cotton with less trash and less contamination," he said.
Apart from this, domestic cotton quality here was a big issue this year due to various factors, he said, adding there has been a drop in realisation levels in spinning mills, which is leading to straight two to three per cent increase in manufacturing cost at the yarn stage.
A 15 member ITF cotton team would again visit two important cotton growing states in the coming week to meet partner ginners to work out an action plan for the current year, Prabhu added.
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