SIMA urges textile mills to not buy cotton in panic

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March 02, 2024 The Intercontinental Exchange (ICE) cotton future is expected to experience a huge inverse post July 2024, which in turn will soften the Indian domestic cotton prices, says SIMA chairman Dr. S.K. Sundararaman.

The Association’s chairman, Dr. S.K. Sundararaman, stated in a news statement that domestic cotton prices have increased by 10 per cent to 12 per cent over the past 15 days, and that the cost of the popular Shankar – 6 variety of cotton has dropped from Rs. 55,300 to nearly Rs. 62,000 per kilo over the previous two weeks.

According to estimates from the Committee on Cotton Production and Consumption, 316.57 lakh bales will be produced, 12 lakh will be imported, and 310 lakh bales will be consumed domestically during the current cotton season.

At the mills, capacity utilisation has surged from 70 per cent to 90 per cent, and around 20 lakh bales have already been contracted for export. He has made it clear that when cotton prices rise towards the international price, there will be less demand for cotton exports.

After July of this year, there should be more cotton available globally because of increased output in Australia, Brazil, and other nations. After July 2024, a significant inverse is predicted for the Intercontinental Exchange (ICE) cotton future, which will lower domestic cotton prices in India.

Thus, while the supply of cotton appears to be adequate, the spinning mills should refrain from making rash purchases. Most of the nations that use cotton are also satisfied with the state of the global cotton supply and the stock-to-use ratios. He advised the mills to be extremely cautious while obtaining cotton and to disregard the rumours.

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