Spinning units of Indore, region are shifting to man-made or blended fibers, unable to pass on the price rise of cotton to customers due to lackluster market. Shift of spinners from 100 per cent cotton to polyester and viscose is likely to help them restore margins and profit and rule out the option for a production cut.

These spinning units have been blending cotton with polyester and viscose after cotton prices rose steeply due to restricted supply and lower output. Spot cotton prices in local market have risen to over Rs 129 per kg from Rs 98 per kg in April, according to local traders.

There are about 40 spinning units in MP and the units with the capacity of 1 lakh spindles requires around 450-500 bales of cotton per day. Cotton production in 2015-16 (crop year October- September) fell to 352 lakh bales (170 kg each) compared to 380 lakh bales in the previous year.

Viscose Staple Fiber (VSF) based apparel exports have grown at a compounded annual growth rate of 27 per cent during financial year 2014 to 2016. Supply of cotton has squeezed in the local markets further pushing the prices while the arrival from the new crop is expected only by October. According to industry players, cotton prices are unlikely to come down before the month of October.