Fabric demand sparks optimism for steady south Indian cotton yarn

28 Jun '24

3 min read

Fabric demand sparks optimism for steady south Indian cotton yarn

Pic: Adobe Stock

Insights

South Indian cotton yarn prices remained stable despite higher demand from the fabric industry.
Mumbai and Tiruppur markets saw slight improvements, with traders expecting a price rise due to increased fabric and export orders.
Cotton prices in Gujarat surged by due to rain-related supply disruptions.
Mills are pausing sales to hike rates.

South Indian cotton yarn prices remained stable, although there were indications of slightly higher demand from the fabric industry. Trade experts hinted that fabric demand has already improved from the garment industry, which may lead to an increase in cotton yarn prices in the coming weeks. Currently, cotton yarn is being traded at previous levels in the Mumbai and Tiruppur markets. Several spinning mills are attempting to pause their sales to raise their mill rates.

The Mumbai market has seen slightly better demand from power loom owners, but cotton yarn prices did not experience any significant movement. A trader from Mumbai told Fibre2Fashion, "The market has noted higher demand for fabric from the garment industry, raising hopes for higher demand for cotton yarn in the coming weeks. Seasonal demand for the upcoming festival has already been delayed by a few weeks. Export orders are gaining momentum, and manufacturers need to buy raw materials to fulfil their commitments.”

In Mumbai, 60 carded yarn of warp and weft varieties were sold at ₹1,375-1,420 (approximately $16.88-$17.47) and ₹1,220-1,300 per 5 kg (approximately $15.32-$16.28) (excluding GST), respectively. Other prices include 60 combed warp at ₹322-327 (approximately $3.94-$3.99) per kg, 80 carded weft at ₹1,300-1,340 (approximately $16.28-$16.76) per 4.5 kg, 44/46 carded warp at ₹250-256 (approximately $3.08-$3.14) per kg, 40/41 carded warp at ₹247-255 (approximately $3.02-$3.11) per kg and 40/41 combed warp at ₹285-290 (approximately $3.47-$3.53) per kg, according to trade sources.

The Tiruppur market also witnessed higher uptake of cotton yarn, but prices did not increase as sellers are trying to liquidate a portion of their stocks. Trade sources mentioned that mills are likely to increase their mill rates by ₹4-5 per kg next month due to better demand and already rising cotton prices. Several mills have paused their selling to limit the availability of cotton yarn.

In Tiruppur, knitting cotton yarn prices were noted as 30 count combed cotton yarn at ₹264-270 (approximately $3.20-3.27) per kg (excluding GST), 34 count combed cotton yarn at ₹274-279 (approximately $3.30-3.36) per kg, 40 count combed cotton yarn at ₹285-290 (approximately $3.45-3.53) per kg, 30 count carded cotton yarn at ₹239-246 (approximately $2.87-2.92) per kg, 34 count carded cotton yarn at ₹244-249 (approximately $2.87-2.93) per kg and 40 count carded cotton yarn at ₹249-255 (approximately $3.00-3.06) per kg.

In Gujarat, cotton prices jumped by ₹1,500-1,700 per candy of 357 kg due to lower arrival amid rains in various regions. Mills are also buying cotton to ensure raw material security in the coming months. An increase in ICE cotton also boosted sentiments in the local market. A trader from Gujarat said that heavy rains in Gujarat and other cotton-producing areas led to a slow arrival of cotton. Possible delays in the new cotton arrival also fuelled prices.

Cotton arrivals were recorded at 5,000-6,000 bales of 170 kg in Gujarat, with all-India arrivals estimated at 22,000-25,000 bales. The benchmark Shankar-6 cotton was quoted between ₹58,000-58,500 (approximately $695.59-$701.59) per candy of 356 kg, while southern mills were looking to buy cotton at ₹59,000-59,500 (approximately $708.58-$713.58) per candy.