value-added sector is under severe threat after the recent surge in cotton prices. The entire sector is facing the worst type of crisis due to record high cotton prices, as result of export of yarn. The price of cotton has increased up to Rs 1,400 per 40 kg from September to December 2009 which is a record. Cotton was selling at Rs 3,300 per 40 kg in September, which has now increased to Rs 4,700 per 40 kg.
Our cotton requirement for the country is about 15 million bales whereas our cotton production during the cotton season 2009-10 is expected to be 11.21 million bales. About one million bales have been exported from the country during the season and value added sector would need 3 to 4 million bales of cotton during the next 2 to 3 months. Textile sector is compelled to import cotton at Rs 5,200 per 40 kg.
This unexpected rise in cotton prices is being observed due to increase in yarn prices. All the value added services including power looms, hand looms, hosiery, bed sheets, ready made garments, knit wear, bed wear and others are affecting with this increase in prices.