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Cotton
Textile cos' concern over high ELS cotton prices
G. Gurumurthy
Coimbatore
,
Dec. 25
TEXTILE units producing finer count yarns using extra-long staple (ELS) cotton varieties fear the soaring prices of ELS cotton would render the conversion cost unremunerative for yarn producers.
With the import price of ELS cotton going up, yarn producers feel sandwiched between shortage of ELS cotton and market resistance for prices of yarn converted out of high-priced raw cotton.
"Mills producing finer count yarns for number of years may not be able to switch to coarser count yarn making all of a sudden to ward off the high cost of ELS cotton. This is a difficulty," said Mr P.D. Patodia, Managing Director of Prime Textiles Ltd.
In view of the shortage in the indigenous supply of ELS cotton, textile mills in the past few years were dependent on imports to the extent of five to six lakh bales every year. But the prices of the superior imported ELS cottons such as the PIMA variety from the US or the Egyptian cotton varieties have shot up by 40-45 per cent in the past two months, thanks to the perceptible demand for ELS and the shortage in the indigenous supplies.
"What was the normal price quote of around 90 cents per pound, the PIMA/Egyptian cotton varieties' prices have spiralled to $1.45 per pound today," said Mr Patodia.
While the short supply in the availability of ELS has fuelled the price surge, the possible withdrawal of the farm subsidy by the US Government for that country's cotton farmers is also believed to have pushed up the price quotes for the PIMA cotton. This is also said to have contributed to the sympathetic price reactions on the Egyptian cotton front too.
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