With cotton prices stabilizing around the Rs 61,500-62,500 per candy price range for over a week, the Gujarat textile industry is anticipating a strong recovery in demand.
Lower volatility in cotton prices has increased confidence in the domestic industry, and the market has seen a substantial number of orders after January 15. The industry expects export demand will rise further, after the Chinese New Year.
In Gujarat, around 45,000 bales arrive every day, while in Maharashtra this number is about 40,000 bales.
So far, Gujarat has registered the arrival at yards of 35 lakh bales this season, while the all-India number is 1.20 crore bales. Strong supply has stabilized cotton prices and for the last one week they have remained in the Rs 61,500 to Rs 62,500 per candy range. This is probably the first time in a year that prices have remained stable and confidence in the market has been boosted.
The domestic textile industry saw substantial demand in the festival and wedding season and with low inventory, new demand has emerged after January 15.
Weaving units and textile processing units are now running at over 60% capacity. Chinese demand was low due to the Chinese New Year. International demand will improve by February 15. If cotton breaks the Rs 60,000 level, the sentiment will turn negative.
