The National Comittee on Textiles and Clothing has urged textile units to avoid panic buying across the value chain, in an effort bring stability of prices.
T. Rajkumar, co-ordinator of the Committee, recently wrote to the units that it was decided at a virtual meeting of the national and regional textile associations held last month to adopt a win-win strategy. However, there is a panic situation again at the fabric stage.
Mr. Rajkumar pointed out that raw materials and finished goods inventory at each segment of the industry has drained out due to prolonged lockdown. Therefore, every manufacturer is trying to build an inventory, apart from meeting the regular production requirement.
Manufacturers across the value chain have to manage with minimal inventory till supplies improve. The current market demand revival is "V" shaped and if the units fail to manage the inventory prudently, manufacturers across the textile value chain may face erosion of working capital if the prices fall (as it happened 2010-2011) causing irreparable damage to the industry, he said.
The country had over 105 lakhs bales of cotton stock during the last season and is likely to have the same stock in the current season. Hence, spinning mills should avoid panic buying by offering higher prices, Mr. Rajkumar said.
And, yarn producers should fulfil their commitments before taking fresh orders, he added.
Source: Read Full Article