New Delhi: Higher raw material cost is likely to impact textile demand during Q1 FY23 on a quarter-on-quarter basis. As per India search (Ind-Ra), sustained rub-off impact from high man-made fibre (MMF) prices amid new arrivals will keep domestic cotton prices to remain at the current high levels during Q1FY23, "Rising cotton and MMF prices are likely to moderate demand for textile fabrics, made-ups and garments as the downstream prices will also rise in tandem with the raw materials," said Shradha Saraogi, Senior Analyst, India Ratings and Research. It generally may also lead to downtrading.

"Besides, Ind-Ra expects- inventory levels to decline by the end of the current cotton season due to a lower opening stock and slightly higher consumption. Similarly, the domestic stocks-to-use ratio could decline in the new cotton season," the rating agency said. and Re-

Furthermore, Ind-Ra expects cotton yarn and spun yarn prices to continue to rise due to higher demand from downstream players as well as export markets.

"Cotton yarn prices increased 3 percent, MoM, in February 2022 due to the rise in cotton prices as well as ad reduction in the production amid the high export and domestic demanded

According to the rating agency, MMF products witnessed a drastic rise in prices o in February 2022 due to an increase in crude oil prices.

"Ind-Ra expects the prices > to increase further owing to the US ban on Russian oil and US tie-ups in Europe, along with a rise in raw material prices, led by the ongoing n geopolitical issues and increased cotton prices."-PTI