Textile production declines for the sixth month

Textile production in India, measured by the Index of Industrial production, declined for the sixth straight month in December 2022 compared to a year ago level. However, production remained positive month on month in the latest month. The declines have also had adverse impact on export of  basic textiles (excluding apparels and garments) during the period and January 2023 export too is sharply negative.

During December, overall textile production was down by a sharp 15% from their levels in December 2021.  Compared to November 2022, production was up 0.4% in December. Within textiles, manufacture of textiles was down 12% year on year while manufacture of wearing apparels shrank 22%. While the former posted seventh straight month of fall, the latter was down for the fifth month in  a row.

Data collated from various ports showed spun yarn export in December 2023 was just 67 million kg down to more than half of the volume exported in December 2021. January 2023 too was bad as 100 million kg was exported but down 28% compared to the volume in January 2022.

Production has been severely affected by the sharp increases in cotton prices since the previous marketing season (2021-22). The non-scientific assessment of cotton crop that season, first gave an impression of a healthy crop while the markets faced alarming shortage of the white fibre at the opening of that season. The official production values were revised sharply down after the peak season was over, but till than the crisis in pricing had deeply penetrated.

In the current season too, the same overestimation continued, prompting farmers to hold back their produce in expectation of higher remuneration. In 2021-22, cotton exports during the first four months had aggregated 3.18 million bales which dwindled sharply to just 0.43 million bales in this season until January.

Sources: MOSPI and Textile Beacon Global Info Services