Yarn prices drop in south India on slow demand, rising cotton arrival

08 Oct '24

4 min read

Yarn prices drop in south India on slow demand, rising cotton arrival

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Insights

Cotton yarn prices in south India have dropped due to sluggish demand and increased cotton arrivals.
Both the Mumbai and Tiruppur markets are facing pressure as spinning mills remain cautious about new purchases.
Retail demand for garments is slow, and cotton prices have fallen by ₹1,200-1,500 per candy in Gujarat.
Experts predict continued bearish trends until summer garment production picks up.

Cotton yarn prices in south India have dropped by ₹2-4 per kg over the past few days, as both the Mumbai and Tiruppur markets are experiencing sluggish demand. This slowdown is due to weak demand from the downstream industry and the increasing arrival of cotton. Spinning mills are adopting a cautious approach to purchasing new cotton, leading to a price decrease of ₹1,200-1,500 per candy (356 kg) in Gujarat's cotton market. According to market experts, cotton yarn prices may continue to trend downward in the coming weeks, as summer garment manufacturing has not yet gained momentum.

In Mumbai, prices have fallen by ₹2-4 per kg since last week. The cotton yarn trade is under dual pressure from slow demand and higher availability of cotton. A Mumbai-based trader told Fibre2Fashion, "Currently, the cotton yarn trade is caught between weak demand and increased cotton arrivals in the country. Lower cotton prices have pulled down yarn prices in both Mumbai and Tiruppur markets. The market may see some recovery when summer garment production picks up."

In Mumbai, 60 carded yarn of warp and weft varieties were sold at ₹1,400-1,440 (approximately $16.67-$17.15) and ₹1,330-1,380 per 5 kg (approximately $15.84-$16.44) (excluding GST), respectively. Other prices include 60 combed warp at ₹322-330 (approximately $3.84-$3.93) per kg, 80 carded weft at ₹1,340-1,380 (approximately $15.96-$16.44) per 4.5 kg, 44/46 carded warp at ₹250-260 (approximately $2.98-$3.10) per kg, 40/41 carded warp at ₹248-258 (approximately $2.95-$3.07) per kg and 40/41 combed warp at ₹276-280 (approximately $3.29-3.33) per kg, according to trade sources.

In Tiruppur, cotton yarn prices have taken a bearish turn. Higher-count carded cotton yarn has dropped by ₹2-3 per kg as stockists and mills face pressure to clear their inventory. According to trade sources, retail demand for garments remains weak, putting pressure on the entire textile value chain. Retail consumers are prioritising essentials such as food over clothing. Stable support from the export market, however, has helped prevent a steeper fall in cotton yarn prices.

In Tiruppur, knitting cotton yarn prices were noted as 30 count combed cotton yarn at ₹266-274 (approximately $3.17-3.26) per kg (excluding GST), 34 count combed cotton yarn at ₹275-282 (approximately $3.28-3.36) per kg, 40 count combed cotton yarn at ₹290-296 (approximately $3.45-3.53) per kg, 30 count carded cotton yarn at ₹242-249 (approximately $2.88-2.97) per kg, 34 count carded cotton yarn at ₹247-251 (approximately $2.94-2.99) per kg and 40 count carded cotton yarn at ₹252-257 (approximately $3.00-3.06) per kg.

In Gujarat, cotton prices have eased due to increasing arrivals and slow purchasing from spinning mills. Cotton prices have dropped by ₹1,200-1,500 per candy (356 kg) over the past few days. After north India, new cotton arrivals have begun in Central and Southern India as well. Traders report that spinning mills remain cautious about fresh purchases amid slow demand and rising supply. Cotton prices are expected to continue to decline unless large-scale procurement by the Cotton Corporation of India (CCI) begins.

Cotton arrivals are estimated at around 10,000-12,000 bales (170 kg each), including a negligible quantity of new cotton. All-India arrivals were estimated at 35,000-40,000 bales. The benchmark Shankar-6 cotton from last season was quoted between ₹56,000-56,500 (approximately $666.99-$672.95) per candy, while southern mills were looking to buy cotton at ₹57,500-58,000 (approximately $684.86-$690.81) per candy. New cotton was traded at ₹55,700-56,200 (approximately $663.42-$669.37) per candy, with a moisture condition limit of 10 per cent. However, the actual moisture levels are higher than this limit.