Firm cotton prices to keep yarn-spinning stocks in check: Analysts

Analysts expect that the inflated cotton prices will continue to haunt small-sized yarn spinners during the first half of FY23 (H1-FY23). However, a good monsoon season can paint a different story

The double whammy of increased freight expenses and higher inflation has seen cotton prices rising over 30 per cent to Rs 46,700 per bale from Rs 35,829 in calendar year 2022 (CY22). This, according to analysts, is slowly eating into the margin and volume growth of the home-grown textile industry. Moreover, with rising interest rates skewing purchasing power of consumers, analysts expect muted demand for their products in the near-term.

India is the second-largest producer of cotton after China with 25 per cent share of overall production. In the past few months, the global demand has shifted away from China