Softening cotton prices turning tides in favor of textile players: Analysts

Increased capacity utilisation, softening cotton prices set to help sector: Analysts

Lovisha Darad New Delhi

Analysts foresee a silver lining emerging for the textile sector with prices of cotton softening 41 per cent from last year's high of Rs 50,530 per bale to Rs 29,910 per bale. That apart, they say that improved capacity utilisation, lowering of domestic cotton premium over international prices, and demand rebound would act as tailwinds for the sector.
"Cotton prices have corrected 38-40 per cent from their all-time high levels. This, along with fall in freight rates, augurs well for textile companies over the medium term to long term. We expect margins of textile companies to improve gradually in the quarters ahead. Moreover, the decline in cotton prices will help Indian players become price-competitive in global markets," said Kaustubh Pawaskar, deputy vice president, Research, Sharekhan by BNP Paribas.
Last month, knitwear exports from Tiruppur, which comprises 50 per cent of India's export hub, rose 1.5 per cent in dollar t

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First Published: Feb 28 2023 | 1:16 PM IST

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