South India cotton yarn prices down, no respite from slow demand

18 Jun '24

4 min read

South India cotton yarn prices down, no respite from slow demand

Pic: Adobe Stock

Insights

South Indian cotton yarn prices declined due to slow demand and selling pressure from mills and stockists.
The downturn is attributed to low demand, downstream industry uncertainty, and a consistent fall in ICE cotton discouraging domestic purchases.
Local market faces pressure due to decreased demand from Bangladesh during a week-long holiday for Eid.

South Indian cotton yarn prices depreciated due to slow demand and selling pressure on mills and stockists. Prices eased by ₹2-4 per kg in the Mumbai and Tiruppur markets. Traders reported that mills and stockists are not receiving expected demand and are struggling to sell their stock due to downstream industry uncertainty. A consistent fall in ICE cotton discouraged domestic market buying, although local cotton prices remained steady. Experts noted that the local yarn market is under pressure due to slow demand from Bangladesh, a major buyer of Indian cotton yarn, which had a week-long holiday for Bakra Eid.

Cotton yarn prices further eased by ₹2-4 per kg in the last couple of days. Traders and stockists were offering lower prices as they faced very low demand. A trader from Mumbai told Fibre2Fashion, "The stockists and traders are unable to find buyers even at lower prices. Overall trade also dipped as nobody wanted to buy cotton yarn in bulk. Fabric demand was not supporting cotton yarn buying.”

In Mumbai, 60 carded yarn of warp and weft varieties were sold at ₹1,375-1,420 (approximately $16.48-$17.02) and ₹1,220-1,300 per 5 kg (approximately $14.62-$15.58) (excluding GST), respectively. Other prices include 60 combed warp at ₹322-327 (approximately $3.86-$3.92) per kg, 80 carded weft at ₹1,300-1,340 (approximately $15.58-$16.06) per 4.5 kg, 44/46 carded warp at ₹250-256 (approximately $3.00-$3.07) per kg, 40/41 carded warp at ₹247-255 (approximately $2.96-$3.06) per kg and 40/41 combed warp at ₹285-290 (approximately $3.42-$3.48) per kg, according to trade sources.

The Tiruppur market also noted a fall of ₹2-3 per kg in cotton yarn prices. Mills and stockists were trying to clear their stocks at lower prices. Trade sources said that cotton yarn demand further dried up due to the week-long holiday in Bangladesh for Bakra Eid. The country imports cotton yarn regularly. The holiday will continue for the next 2-3 days. After that, importers from the country will begin buying from India. A trader said that mills are unable to buy cheaper cotton as they are unable to clear their stocks. Earlier, they had to buy cotton at higher prices. They cannot reduce their cost of production by consuming cheaper cotton.

In Tiruppur, knitting cotton yarn prices were noted on Thursday as: 30 count combed cotton yarn at ₹264-270 (approximately $3.16-3.24) per kg (excluding GST), 34 count combed cotton yarn at ₹274-279 (approximately $3.28-3.34) per kg, 40 count combed cotton yarn at ₹285-290 (approximately $3.42-3.48) per kg, 30 count carded cotton yarn at ₹239-246 (approximately $2.86-2.95) per kg, 34 count carded cotton yarn at ₹244-249 (approximately $2.92-2.98) per kg and 40 count carded cotton yarn at ₹249-255 (approximately $2.98-3.06) per kg.

In Gujarat, cotton prices were hovering near the previous levels as traders expect there will be no pressure on the domestic market despite falling ICE cotton prices. A trader from Gujarat said that the domestic market will see lower arrival and availability of cotton for the next couple of months. This can prevent cotton prices from going down with falling ICE cotton. However, lower demand for garments and fabric will be a negative factor for the natural fibre.

Cotton arrivals were recorded at 10,000-12,000 bales of 170 kg in Gujarat, with all-India arrivals estimated at 38,000-40,000 bales. In Gujarat, the benchmark Shankar-6 cotton was quoted between ₹55,800-56,000 (approximately $668.82-$671.21) per candy of 356 kg, while southern mills were looking to buy cotton at ₹57,000-57,500 (approximately $683.20-$689.19) per candy.