In the face of adversity, cotton yarn makers in Gujarat are expected to surpass their revenues of 2019-20. According to estimates from the All Gujarat Spinners’ Association (AGSA), the industry’s turnover was Rs 29,000 crore in 2019-20. Spinning units in the state have already achieved this by the end of the third quarter of 2020-21, leveraging the increased demand and higher prices of cotton yarn.
Cotton yarn prices have increased by 56 per cent from April to November 2020, when prices stood at Rs 265 per kg, according to AGSA. “Cotton yarn price was Rs 195 in the first half of March 2020, after which it fell to Rs 170 in April soon after the lockdown. With a sharp increase in price recently, the industry has regained momentum. At this price, realization from orders has increased for cotton yarn makers. Consequently, revenues of Q4 of 2020-21 will be growing at 25 per cent from the corresponding quarter last year,” said Saurin Parikh, President, AGSA.
Cotton yarn prices rose over the past two months or so due to an unprecedented increase in demand, especially in the export market. “Pipeline stocks dried up a few months of the lockdown and demand sharply increased. Currently, all units are operating at full capacity while at least 70 per cent of the stock is being exported to countries like Vietnam, Bangladesh and China,” said Parikh.