Punjab's textile industry to consume more cotton this year

CHANDIGARH: Punjab's textile industry would consume about 20-22 lakh bales this year, up from 19 lakh bales it needed last year, on account of massive capacity expansion over the last one and a half year.

"It (consumption) will be purely because of large scale investment made by the industry in increasing the spindles capacity in order to cash in on the growing demand for the apparel and garments," Vardhman Textiles Limited's Corporate General Manager I J Dhuria said here.

As per trade analysts, the textile industry of Punjab has added 4 lakh spindles during last one and half year and is expecting to add 4 lakh more spindles in next one year.

"The capacity expansion taking place in Punjab has been one of the highest ever witnessed by the industry," an analyst said, adding that majority of the units went for expansion in order to avail the benefits of TUF scheme.

Punjab has a capacity of almost 22 lakh spindles for producing fabric and yarn.

The industry sources cotton mainly from Bathinda and Abohar.

"Industry likes to procure cotton for its own consumption from the state itself as it will get set off against the VAT paid on cotton. Otherwise, the industry will have to shell out CST at a rate of 3 per cent which will add to its cost of production," said Dhuria.

Punjab hopes to produce 26.90 lakh bales of cotton this year as against last year's output of 26.78 lakh bales.

Cotton growers in the state this year would realise Rs 2150 -2375 per quintal as against Rs 1900-2100 last year.

However, the margins would remain under pressure because of high pricing of cotton crop this year, an expert said.