Bearish tone persists in south Indian cotton yarn trade, prices stable

12 Jul '24

3 min read

Bearish tone persists in south Indian cotton yarn trade, prices stable

Pic: Adobe Stock

Insights

The cotton yarn trade in South India remains bearish with no significant price changes.
High container freight charges and slow export demand are major concerns, along with uncertain festival demand domestically.
Mumbai and Tiruppur markets see stable yet pressured prices as traders offer discounts to attract buyers.
Demand for cotton yarn may stay muted.

Bearish tone persisted in cotton yarn trade in south India market today, although the prices did not see any significant movement. Traders said that steep hike in container freight charges added woes to getting new export orders from foreign importers. Cotton yarn trade is facing not only slow export demand but also uncertainty regarding festival demand in the domestic market. Trade experts expect the demand of cotton yarn to remain silent at least for the next few weeks. The prices may also see downward trend in the near future.

Mumbai market noted poor demand from downstream industry as buyers were very cautious for fresh buying. A trader from Mumbai told Fibre2Fashion, "Stockists, traders and mills are feeling pressure due to slow demand. They are offering discounts at current prices to attract buyers. The market is not likely to see better buying in the next few weeks.”

In Mumbai, 60-carded yarn of warp and weft varieties were sold at ₹1,375-1,420 (approximately $16.46-$17.01) and ₹1,270-1,320 per 5 kg (approximately $15.21-$15.81) (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 $15.57-$16.05) per 4.5 kg, 44/46-carded warp at ₹260-267 (approximately $3.11-$3.20) per kg, 40/41-carded warp at ₹247-255 (approximately $2.96-$3.05), per kg and 40/41 combed warp at ₹280-283 (approximately $3.35-$3.39) per kg, according to trade sources.

Tiruppur market also saw stability in cotton yarn prices. Trade sources said that garment export orders are not encouraging for cotton yarn trade. Continued hike in container freight charges is also a major hurdle in bagging new export orders. Although cotton yarn prices remained steady, spinning mills are struggling to sell their production. At present, there is no indication which can raise hope for higher demand of cotton yarn, fabric and garment.

In Tiruppur, knitting cotton yarn prices were noted on Thursday as: 30 count combed cotton yarn at ₹264-270 (approximately $3.16-3.23) 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 $3.41-3.37) 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 $2.98-3.05) per kg.

In Gujarat, cotton was traded at the previous prices as spinning mills buying was limited. Meanwhile, cotton arrival also decreased due to heavy rain in various parts of the country. According to the trade sources, ginners, MNCs and stockists expect price rise in the coming week as cotton availability is expected to reduce. However, spinning mills are sceptical about demand from the downstream industry.

Cotton arrivals were recorded at 5,000-7,000 bales of 170 kg in Gujarat, with all-India arrivals estimated at 15,000-18,000 bales. The benchmark Shankar-6 cotton was quoted between ₹57,800-58,300 (approximately $691.96-$697.94) per candy of 356 kg, while southern mills were looking to buy cotton at ₹58,500-59,000 (approximately $700.34-$706.32) per candy.