South Indian cotton yarn prices stable with optimism for future demand

24 May '24

3 min read

South Indian cotton yarn prices stable with optimism for future demand

Pic: Adobe Stock

Insights

Cotton yarn prices remain stable in south Indian markets, with optimism for increased demand in the coming weeks due to a recent rise in ICE cotton prices.
Spinning mills have reduced discounts, slightly raising mill rates.
Labour shortages are expected to ease in mid-June as workers return post-elections, potentially boosting production.

Although cotton yarn prices continued to remain stable in south India, the market noted increased optimism for the coming weeks. Market experts stated that the recent rise in ICE cotton motivated buyers to make more purchases. Spinning mills have reduced discounts on cotton yarn, resulting in slightly higher effective mill rates. However, market rates remained unchanged and were still lower than mill rates. Traders argued that buyers will return for fresh purchases if ICE continues to rise. The labour shortage is expected to ease in mid-June as workers return to textile production hubs from their native places. The general election will also conclude in two weeks, which will normalise the atmosphere for business and industrial activities.

Cotton yarn was traded at previous prices in Mumbai. Overall demand from the consumer industry and traders was limited. A trader from Mumbai told Fibre2Fashion, "The market noted thin trade due to labour shortage. Workers will be coming back after the first week of next month. Production activities will improve in mid-June. Seasonal changes in production patterns will also be visible. The garment industry will focus more on apparel for the festival season.”

In Mumbai, 60 carded yarn of warp and weft varieties were sold at ₹1,400-1,450 (approximately $16.80-$17.40) and ₹1,275-1,360 per 5 kg (approximately $15.30-$16.32) (excluding GST), respectively. Other prices include 60 combed warp at ₹327-331 (approximately $3.92-$3.97) per kg, 80 carded weft at ₹1,350-1,390 (approximately $16.20-$16.68) per 4.5 kg, 44/46 carded warp at ₹255-260 (approximately $3.06-$3.12) per kg, 40/41 carded warp at ₹250-258 (approximately $3.00-$3.10) per kg, 40/41 combed warp at ₹288-293 (approximately $3.46-$3.53) per kg, and 30/32 carded warp at ₹243-247 (approximately $2.92-$2.96) per kg, according to trade sources.

The Tiruppur market also noted stability in cotton yarn. However, the declining trend in mill rates came to an end as there were better prospects for demand. Trade sources stated that mills have decreased discounts after the rise in ICE cotton. They expect better demand in the coming weeks. The market is confident of strong demand for cotton yarn next month. Export orders for garments may also pick up for the coming winter season.

In Tiruppur, knitting cotton yarn prices on Thursday were noted as: 30 count combed cotton yarn at ₹268-273 (approximately $3.22-3.28) per kg (excluding GST), 34 count combed cotton yarn at ₹277-282 (approximately $3.32-3.38) per kg, 40 count combed cotton yarn at ₹290-295 (approximately $3.48-3.54) per kg, 30 count carded cotton yarn at ₹239-243 (approximately $2.87-2.92) per kg, 34 count carded cotton yarn at ₹245-249 (approximately $2.94-2.99) per kg and 40 count carded cotton yarn at ₹251-256 (approximately $3.01-3.07) per kg.

In Gujarat, cotton prices improved by ₹500 per candy of 356 kg in the last couple of days. There was limited buying amid selling pressure from MNCs, but increased ICE cotton supported local prices. Traders said that US cotton gained more than 5 per cent in the last two trading sessions of ICE. Therefore, Gujarat’s cotton prices improved by around 1.5 per cent. Mills are facing a liquidity crunch due to slow demand in the downstream industry.

Cotton arrivals were recorded at 10,000-11,000 bales of 170 kg in Gujarat, with all-India arrivals estimated at 28,000-30,000 bales. In Gujarat, the benchmark Shankar-6 cotton was quoted between ₹56,500-57,000 (approximately $679.98-$686.00) per candy of 356 kg, while southern mills were looking to buy cotton at ₹57,000-57,500 (approximately $686.00-$692.02) per candy.