08 November 2023, Mumbai
A recent report by Seshadri Ramkumar, Professor at Texas Tech University, USA, highlights the impact of declining global textile demand on the cotton ecosystem.
The report notes that India, the second-largest cotton producer, is projected to experience lower output in the upcoming season, despite reduced cotton prices.
This is due to several factors, including trade imbalances, high power costs in India, and reduced global demand.
Virtuous cycle
The decline in global demand is having a significant impact on mill operations, with unit closures and reduced yarn consumption reported in South India.
Industry experts are recommending that textile companies closely monitor global economic trends, demand patterns, and supply dynamics before making expansion or inventory decisions.
Leap of faith
However, there is some hope for a revival of global demand, particularly during the Christmas season. If this occurs, it could provide a much-needed boost to the textile industry.
In addition to the above, here are some other key takeaways from the report:
The premium segment of the textile industry is expected to continue to perform well, despite the overall decline in demand.
Companies can differentiate themselves from the competition by innovating in terms of product design, materials, and manufacturing processes.
Moving ahead
Industry experts recommend Close monitoring and cautious optimism; Expanding distribution channels to reach a wider customer base is another important strategy.
Companies can also improve profitability by controlling costs, streamlining operations, and negotiating better deals with suppliers.
Overall, the report paints a mixed picture for the textile industry.
On the one hand, declining global demand is hurting production, prices, and mill operations. On the other hand, there is some hope for a revival of demand, particularly during the Christmas season. Textile companies need to be prepared for both scenarios by closely monitoring market trends and adapting their strategies accordingly.
5 key insights :
- Global demand down, India's output to fall
- Trade imbalances, power costs, global demand to blame
- Unit closures, reduced yarn consumption in South India
- Premium segment to perform well, companies to innovate
- Close monitoring, cautious optimism, expand distribution
