India Ratings and Research (Ind-Ra), the ratings agency, has said that reduction in the impact of Covid-19’s third wave, as well as accelerated re-opening activities, will boost textile demand in FY23. Reduction in logistics issues for export demand will aid in keeping healthy demand.
It said that domestic demand for all the textile sub-sectors has continued to improve from Q2 FY22, after a slight dip in Q1 FY22.
The increased demand momentum, along with the supply chain issues, has increased the realisations. Demand for cotton remained all-time high in H2 FY21, leading to reduced opening stock for the new cotton season. The rise in prices of cotton has led spinners to accumulate the stock.
It further added that demand for MMF (man-made fibre) has continued to increase, mainly due to the rise in cotton prices, leading to a shift of demand from cotton to MMF, to an extent. The demand momentum sustained for home textiles in the domestic market because of improved consumer spending.
The textile exporters in the cotton yarn segment continued to witness an improvement during 7 months of FY22 with volumes exceeding 47 per cent Y-o-Y over FY21.
The agency expects export volumes to remain higher for FY22 over FY20 and FY21, on back of an increasing demand for Indian yarn.
The export of fabric and apparel also recovered to the pre-Covid levels during 8 months of FY22 and is likely to sustain with the opening up of economies and the adoption of ‘China Plus One’ strategy by importing countries.
