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Limited inventory focus cools cotton yarn demand in south India

19 Jul '24
3 min read
Limited inventory focus cools cotton yarn demand in south India
Pic: Adobe Stock

Insights

  • South India cotton yarn market faced sluggish demand and a liquidity crunch, with no significant price movement.
  • Buyers were cautious, reducing their capital deployment in stocks.
  • Gujarat saw limited cotton trade, with mills seeking lower prices while sellers held out for higher rates.
  • All-India cotton arrivals were estimated at 14,000-16,000 bales.
The south India cotton yarn market continued to see sluggish demand and a liquidity crunch. There was no significant movement in cotton yarn prices in the Mumbai and Tiruppur markets. Trade sources in both markets stated that sellers are feeling pressure to find buyers. Not only the fabric segment but the entire textile value chain is facing slow demand as traders, stockists, and consumer industries are trying to manage their inventories. Their buying appetite is reducing consistently as they do not have confidence in strong buying within the value chain.

The Mumbai market did not see any improvement in demand. Cotton yarn prices remained steady. Buyers were absent from the market as they do not want to deploy more capital in stocks. A trader from Mumbai told Fibre2Fashion, "Buying appetite has reduced in the entire value chain as buyers want to manage their inventories without engaging more capital. They are facing a lack of confidence regarding an upward trend in the coming week even though festival buying will begin next month.”

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.

The Tiruppur market also witnessed stability in cotton yarn prices amid very slow buying from the downstream industry. Trade sources said that the consumer industry was silent regarding fresh buying of cotton yarn. They preferred buying in a smart manner so they need limited cash for stocking the product. An uncomfortable level of stocks is discouraging buyers from making fresh purchases.

In Tiruppur, knitting cotton yarn prices were noted 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 trade was limited as a price mismatch persisted. The prices were unchanged amid negligible arrival. According to trade sources, mills are looking to buy cotton at a lower level, but sellers are not ready to sell their stock at a lower price. They preferred to hold their stocks for a couple of weeks as they expected prices to rise in the last months of the current marketing season.

Cotton arrivals were recorded at 4,000-5,000 bales of 170 kg in Gujarat, with all-India arrivals estimated at 14,000-16,000 bales. The benchmark Shankar-6 cotton was quoted between ₹57,700-58,200 (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.

Disclaimer: The prices in this article are based on market sources and hence, readers are recommended to do their own research before making any decision. The publisher and their affiliates are not liable for any inaccuracies or actions taken based on this information.

Fibre2Fashion News Desk (KUL)

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