(yarnsandfibers) -- The textile industry should recover from the demand slump witnessed last financial year to post a 6% growth in yarn production and 5.7% growth in fabric production in 2012-13, says the Centre for Monitoring Indian Economy (CMIE). The steep rise in prices hit production of both yarn and cloth in 2011-12 and yarn production fell 5.1%. The expectation this time round is that better domestic demand and addition of fresh capacity will boost growth.
Cotton yarn, which saw an 8% fall last fiscal, should revive and post 8.5% growth in output this year. Synthetic yarn will grow by a more modest 3% says CMIE. In April, synthetic yarn production fell sharply by 7.6% pulling down overall yarn production with it. As a result, April 2012 saw yarn production down 3.2% although cotton yarn output remained flat at 0.4% growth.
As for fabrics, it showed fabulous growth in April. Fabric production was up 18.5% though some of that growth is attributable to the low base effect - last April saw fabric production down 13.5%. Synthetic fabric production grew fastest in April at a 24% clip while cotton fabric production grew at 12%. According to CMIE, a likely 12% drop in cotton prices should revive the fortunes of the fabric industry and fabric production should grow by 5.7% thanks to a pick-up in domestic demand and addition of new capacity. Synthetic fabric and cotton fabric will clock 5.4 and 4% growth respectively, says CMIE.
MRC