Adopt a direct-to-mill allocation strategy for cotton urge textile associations

Fiber dynamics changing as trading entities aggressively consolidate stocks in Indian textile sector. Between January and March, merchant traders secured 32.5 lakh bales of cotton, vastly overshadowing the 18 lakh bales purchased by spinning mills. This concentration of raw material in the hands of intermediaries has prompted textile associations to urge the Cotton Corporation of India (CCI) to adopt a direct-to-mill allocation strategy to safeguard production margins.

Analysts say, this procurement imbalance risks a price squeeze for yarn manufacturers already grappling with fluctuating export demand. The current purchasing pattern threatens to disconnect domestic lint prices from global benchmarks, placing an undue burden on high-count yarn producers, notes Rajesh Mehta, Textile Consultant.

This trend mirrors the 2022 supply crunch when yarn prices rose 15 per cent in a single quarter due to limited spot-market availability. As mills shifted to sustainable fabric blends, the reliability of long-staple cotton supplies remains a critical bottleneck. Large-scale apparel exporters are now monitoring these upstream disruptions, fearing that inflated yarn costs will erode their competitiveness against Southeast Asian rivals. Addressing this procurement gap is essential for maintaining the stability of the broader apparel ecosystem and ensuring that manufacturing output aligns with projected seasonal demand.

The Cotton Corporation of India acts as the central agency for price support and procurement of raw cotton. Serving the vast domestic spinning and garmenting sectors, it manages stocks across major producing states. CCI aims to increase its digital auction footprint to improve transparency while maintaining a stable financial surplus through strategic inventory liquidation. Established in 1970, it remains the primary stabilizer for India’s multi-billion dollar textile economy.