Due to the high cotton price in India, the continuous sharp drop in orders from European and American buyers, the rising electricity price and the sharp drop in Indian cotton yarn exports to Bangladesh/China from July to June, the operating rate of Indian cotton textile enterprises has dropped sharply since the second half of 2022, and the shutdown rate of cotton mills in Gujarat once reached 80%-90%. At present, the overall operating rate of each state is 40%-60%, and the progress of returning to work and production is very slow.
Compared with last year's Diwali, so far this year, the demand of Indian textile industry has not reached 50-60% of last year's. Buyers want newly designed fabrics, so most textile departments are trying to clean up their inventory. Due to the increase of input cost, the profit of weaving factory has also decreased.
The influence of Indian cotton textile industry;
Cotton consumption in Indian factories is flat, yarn prices are falling due to weak domestic and international demand, insufficient export demand and competition from other fibers have affected the profits of many medium-sized textile mills, and textile mills continue to control raw material inventories. The price of cotton in India has almost doubled, and most export manufacturing units are losing money. Production costs will rise further, which will also have an adverse impact on logistics costs.
Indian textile export demand is weak because buyers are not prepared to take any risks. Due to weak market demand, the price of cotton yarn in India further fell to 8 rupees per kilogram. Due to poor demand in the clothing industry, about 70%-80% of electric looms are temporarily closed.