09 April 2022, Mumbai:
Higher raw material cost is likely to impact textile demand during Q1FY23 on a quarter-on-quarter basis.
As per India Ratings and Research (Ind-Ra), sustained rub-off impact from high man-made fibre (MMF) prices amid new arrivals will keep domestic cotton prices to remain at the current high levels during Q1FY23.
ShradhaSaraogi, Senior Analyst, India Ratings and Research, says,Ind-Ra also expects inventory levels to decline by the end of the current cotton season due to a lower opening stock and slightly higher consumption.
Similarly, the domestic stocks-to-use ratio could decline in the new cotton season.
According to the rating agency, MMF products witnessed a drastic rise in prices in February 2022 due to an increase in crude oil prices.
Ind-Ra expects the prices to increase further owing to the US ban on Russian oil and US tie-ups in Europe, along with a rise in raw material prices, led by the ongoing geopolitical issues and increased cotton prices.
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