Photo: BloombergSouthern India Mills Association’s (SIMA’s) statement assuring spinning mills of stable cotton prices and supply should provide mills some comfort. The sharp 10-15% rise in cotton prices in the domestic markets between October and February had led to concerns about cotton supplies for the season. If cotton prices remain stable from here on, it will help contain raw material costs for a few quarters ahead. And while SIMA’s assurance of stable cotton supply may support stock prices, the upside may well be limited for the above-mentioned reason. For any re-rating, investors will look for news of higher yarn exports on the back of higher global demand.

Source: Mint March 27, 2017 02:03 UTC