Indian Textile Units Should Avoid Panic Buying

The National Committee on textiles and clothing has urged the country's textile units to avoid panic buying in the industry's value chain in order to stabilize prices.

T. Rajkumar, the coordinator of the committee, recently wrote to various units to inform the Commission of the setting of a win-win strategy at its online meeting with national and local textile associations in December 2020. But at the end of the fabric, there was an emergency again.

Mr. Rajkumar noted that stocks of raw materials and manufactured goods in all sectors of the industry had been depleted as a result of the prolonged blockade. Therefore, in addition to meeting the normal production requirements, every manufacturer is trying to build inventory.

Until supply improves, manufacturers in the value chain will have to manage with minimal inventory, Rajkumar said. The current market demand recovery is V-shaped. If the unit fails to manage inventory prudently, the manufacturer's working capital may be eroded and irreparable damage will be caused when prices fall (as happened in 2010-2011).

Rajkumar stressed that the country had more than 10.5 million bales of cotton in the last quarter, and the inventory forecast will remain unchanged this quarter. Therefore, spinning mills should avoid panic buying with higher prices. And the yarn manufacturer should complete the existing order first and then accept the new order.