India’s National Committee on Textiles and Clothing has urged the country’s textile units to avoid panic buying in the industry value chain in order to stabilize prices.
Committee coordinator T.Rajkumar recently wrote to all units to inform the committee that at the online meeting with national and local textile associations in December 2020, The proposed win-win strategy sets the tone. But on the fabric side, there was an emergency again.
Mr. Rajkumar pointed out that due to the prolonged lockdown, stocks of raw materials and finished goods in various segments of the industry have been depleted. So every manufacturer is trying to build inventory in addition to meeting regular production requirements.
Rajkumar said until the supply situation improves, manufacturers in the value chain will have to manage with minimum inventories. The current market demand recovery is V-shaped and if units cannot manage inventories carefully, then when prices fall (as happened in 2010-2011), manufacturers’ working capital may be eroded and cause irreparable damage.
Rajkumar emphasized that the country’s cotton inventory exceeded 10.5 million bales in the last quarter, and the inventory estimate for this quarter will remain unchanged. Spinners should therefore avoid panic buying with higher prices. And yarn manufacturers should first complete existing orders before taking new orders.
