India's textile industry is in serious crisis

by:JIYALI     2021-08-18
The Indian textile industry uses cotton as the main raw material. Recently, due to the soaring cotton price, the textile industry has fallen into a serious crisis.  India's cotton production this year hit a new high of 31.5 million bales. But domestic industries cannot benefit from domestically produced cotton.   On the other hand, due to abnormal exports and speculative business by international buyers in the domestic market, there is a huge gap in the quality of cotton in Indian textile factories. Dr. KVSrinivasan, President of the Southern Textile Mills Association of India, said that according to the project?ahrefu003d u003d2008-04-01u0026Submitu003d%CB%D1%CB%F7targetu003d_blankclassu003dorange2>Anhui5?ahrefu003d A8------%BC%DB%B8%F1%D0%D0%C7%E9----1.htmltargetu003d_blankclassu003dblank1> Cotton price, even after the cotton yarn price rises slightly, the textile factory is still losing money edge.   He is worried that if the problem is not solved immediately, the entire textile industry may stop production, causing millions of people to lose their jobs.   He said that India’s cotton inventory-to-use ratio is steadily declining. In contrast, the global inventory-to-use ratio is 45%.   He said that competing countries such as China and Pakistan are very cautious about the stock-to-usage ratio, and they keep this ratio at around 35% by importing a large amount of Indian cotton.  Cotton is a seasonal commodity, which is completely dependent on rainy season precipitation. Maintaining adequate and adequate inventory is a necessary means to deal with unforeseen circumstances. Only in this way can we meet customer needs. He said that TamilNadu State accounts for more than 50% of the total number of spindles in India. Now, the state of cotton shortage is very serious.   The cotton price trend analysis from 2004-05 to 2007-08 clearly determined the relationship between the stock-to-use ratio and cotton prices. In 2004-05, the stock-to-use ratio was 37%.   Next, cotton prices were relatively stable in 2004-05. In subsequent years, from 2005-06 to 2007-08, the inventory-to-use ratio fell from 24% in 2005-06 to 21% in 2006-07, and then to 18% in 2007-08.  The decrease in the inventory-to-use ratio is due to the continuous expansion of raw cotton exports. In 2005-06, 4.7 million bales were exported, 5.8 million bales were exported in 2006-07, and 8.5 million bales were exported in 2007-08, a record high.
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