The Hindu Business Line : `Spurt in cotton, yarn prices temporary'

The spurt in raw cotton price as well as in the prices of cotton yarn is temporary phenomenon caused by disruption in cotton supply affected by the recent floods in major upmarket cotton production centres. Cotton supply situation is easing and hence there is no need for the textile trade including the handloom and powerloom producers to panic on the raw material front, the officials from the regional office of the Textile Commissioner, Government of India, say.

Coming out with an official clarification on the current cotton and cotton yarn prices situation, the regional office of the Textile Commissioner, Coimbatore has maintained that the recent rains and serious floods in Gujarat, Rajasthan, Maharashtra/Madhya Pradesh severely affected the movement of cotton leading to the spurt in prices of certain cotton varieties such as LRA, H-4 and MECH-1. As a consequence, certain coarse count yarn varieties (up to 40s count) made out of these cotton have also registered sympathetic price surge. However, the flood situation in those States having improved now, the transport of cotton to the consuming centres like Tamil Nadu has already commenced. The market has also begun to witness a fall and with further supplies, it would ease further leading to price stabilisation, said Mr D. Bandyobadhyay, deputy director in-charge, regional office of the Textile Commissioner, Coimbatore.

According to Mr Bandyobadhyay, the prices of cotton yarn, which too had gone up with the `shortage of raw cotton' is expected to come down sooner. The cotton production during this season is expected to be comfortable. The new cotton crop is also expected to hit the market by the end of this month, which will lead to taming of the prices. Hence there is no `need for panic' as there will not be any scarcity of raw cotton in the country, Mr Bandyobadhyay has said in a communication, adding that his department was keeping vigil on the situation.

The textile ministry officials' clarification regarding the raw cotton and cotton yarn prices situation has come in the wake of resentments aired in major handloom and powerloom weaving centres like Erode, Tiruchengodu, Salem and Karur over the recent rise in the prices of spun yarn consumed by the decentralised weaving sectors.

According to official figures available, while the cotton prices showed an increase of 10-15 per cent, in the case of cotton yarn, its price has gone up by 5-10 per cent depending upon the counts between August 2006 and first week of this month.

While the 20s spun yarn prices went up to Rs 100-102 per kg from last month's Rs 90-97 price band, the 30s count yarn prices increased from Rs 97-100 to Rs 107-115. As for 40s count yarn, its price band of Rs 111-122 in August had surged to Rs 116-127.

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