The Basic Factor Of Recovery In Spinning Mills Depends On The Demand For Cotton Yarn.

The prospect of operating profit is likely to improve, though it is only slightly improved.

The plant once again benefited from falling raw material prices.

Because

The cotton mill was able to breathe.

The price of raw cotton (Shang Carle - 6) is almost half the price of 60000 rupees / candy in March 2011.

In fact, the performance of India cotton mill has improved in the first quarter of this year.

Large scale mills have small profits, though lower than the same period last year.

Some factory losses decreased compared with the previous quarter.

Although the prospects for operating profit have only slightly improved, the cotton mill has benefited from lower raw material prices.

This has led to a rise in the stock prices of most large spinning mills.

But investors must be aware that textile mills have a key stumbling block to overcome.

Can they purchase or hoard raw cotton at current low prices? This will help to improve profitability in the future.

Industry observers estimate that the spinning mills bear high interest costs, making it difficult for them to buy cotton at low prices.

For comparison, attention must be paid to the trend of China's spinning mills (China is the largest cotton textile producing country).

They imported cotton from the international market to make up for the lack of domestic cotton production.

According to the report of the International Cotton Advisory Committee, the cotton trade has expanded over the past 2011-21012 years as China's cotton exports almost doubled.

Ironically, when this happens, the amount of cotton used in the global cotton mill is reduced by about 7-8% (the lowest level in 8 years).

Similarly, India's domestic situation is also the same, because spinning mills expand production, cotton yarn prices have not improved.

According to the South India spinning mill Association report, yarn trading volume is weak and prices continue to decline in the past two months.

However, export registration is increasing during this period, which may be a blessing to the spinning mills in view of the depreciation of the rupee.

They must protect themselves in exchange rate fluctuations.

Finally, it is pointed out that due to the control of the cost of raw materials,

Can the factory finish a beautiful turn? The basic factors depend on the demand of cotton yarn, and the demand ultimately raises the price.

In turn, to a large extent, it depends on the demand for clothing and home textiles in three big markets: they are the United States, Europe and Japan.

All of these are currently challenged by severe economic recession.

Any improvement in the price of domestic yarn factories in India will depend on the recovery of textiles and yarn in the global market.