Thanks to the increased demand and higher prices of cotton yarn, Gujarat-based cotton yarn makers are all set to surpass their revenues of 2019-20.
All Gujarat Spinners’ Association (AGSA) estimated the industry’s turnover to be Rs. 29,000 crore in 2019-20, and Gujarat’s spinning units already achieved this by the end of the Q3 of current fiscal.
And that’s not all! Even revenue of fourth quarter is expected to grow 25 per cent, compared to the same period of last financial year.
Realisation and margins have increased significantly with the rise in prices. Better realisation has helped manufacturers compensate for their losses.
The state has around 150 spinning units with the installed capacity of some 50 lakh spindles. And daily production is around 40 lakh kg.
It is worth mentioning here that in recent months there has been a massive hike in the cotton yarn.
Saurin Parikh, President, AGSA, says, “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, realisation from orders has increased for cotton yarn makers.”
He further added that 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.
At the same time pipeline stocks dried up a few months of the lockdown and demand sharply increased.