The confederation of Indian textile industry have estimated a loss of 11,000 crores for the cotton yarn sector. The confederation has attributed the loss to the government policies such as withdrawal of export incentives, restriction on exports and imposition of excise duty. There has been also un unprecedented fluctuation in the cotton prices, there was steep rise and there was also a steep fall. certainly this can be attributed to a speculation and not to market demand and supply. certainly there has been some foul play happening as far as cotton supply is concerned.
The smaller spinning units are already feeling the heat. The spinning units have already started to cut down the production. There seems no chance of a price stability of cotton. The uncertainty of price of cotton makes textile business more of speculative business. on arrival new cotton to market will determine faith of cotton yarn sector and certain small spinning units.