INDIA: Cotton Prices Boom, Effects are seen in Loom

Spinning mills across the country are reeling under the burgeoning pressure of rising rupee and unreasonably high prices of cotton which rose by 30 percent in the past few months thrusting the industry into a pitfall. Cotton prices which started escalating since 2007 are taking a toll on the textile industry which consumed about 241 lakh bales of cotton last season, and is finding it difficult to meet its ends now. Prices of Shankar 6 variety in particular has risen from Rs18,000 per candy in 2007 to as much as Rs27,000 early this week.

While on the one hand the cost of production increased by 17 percent, on the other, yarn prices rose by a petty 2 percent. Moreover, demand for domestic yarn from Korea, Vietnam, Egypt, Mauritius and Bangladesh has also reduced considerably resulting in losses for mills and making it impossible for them to run operations for the entire week.