Rising demand, supply shortage drive cotton yarn prices in south India

30 Aug '24

4 min read

Rising demand, supply shortage drive cotton yarn prices in south India

Pic: Adobe Stock

Insights

Cotton yarn prices have risen in the Mumbai and Tiruppur markets due to increased demand and a shortage of carded yarn.
In Mumbai, carded weaving yarn prices rose by up to ₹10 per kg, while other varieties increased by ₹2-5 per kg.
Tiruppur saw a rise of ₹2-3 per kg across all counts.
The higher prices are driven by anticipated festival season demand.

Cotton yarn prices increased in the Mumbai and Tiruppur markets of south India due to better demand and a shortage of carded yarn. In Mumbai, the price of cotton carded weaving yarn rose by up to ₹10 per kg, while other types of cotton yarn saw gains of ₹2-5 per kg. Similarly, in Tiruppur, prices increased by ₹2-3 per kg across all counts and varieties of knitted yarn. According to trade sources, there was stronger buying from the consumer industry, which is anticipating higher demand for fabrics in the upcoming festival season. The entire value chain is hopeful for increased demand for garments and other consumer products during this period.

In the Mumbai market, cotton yarn prices traded higher, with carded weaving yarn jumping by up to ₹10 per kg. Other counts and varieties of cotton yarn also saw gains of ₹2-4 per kg. Bharat Shah, a trader from the Maharashtra market, told Fibre2Fashion, "Mills have shifted to producing 80 count carded yarn, creating a shortage of lower-count cotton yarn. Spinners are trying to reduce their cotton consumption by shifting production towards higher counts." He also acknowledged that improved buying for the coming season has driven up cotton yarn prices.

In Mumbai, 60 carded yarn of warp and weft varieties were sold at ₹1,390-1,450 (approximately $16.58-$17.29) and ₹1,280-1,380 per 5 kg (approximately $15.26-$16.46) (excluding GST), respectively. Other prices include 60 combed warp at ₹318-322 (approximately $3.79-$3.84) per kg, 80 carded weft at ₹1,310-1,350 (approximately $15.62-$16.10) per 4.5 kg, 44/46 carded warp at ₹246-262 (approximately $2.93-$3.12) per kg, 40/41 carded warp at ₹241-249 (approximately $2.87-$2.97) per kg and 40/41 combed warp at ₹280-285 (approximately $3.34-3.40) per kg, according to trade sources.

The Tiruppur market also saw higher demand, leading to a price rise of ₹2 per kg across all counts and varieties. Traders reported increased demand from the consumer industry, with rising cotton prices boosting market sentiment in the yarn trade. Buyers are looking to secure raw material supplies at attractive price levels.

In Tiruppur, knitting cotton yarn prices were noted as 30 count combed cotton yarn at ₹264-272 (approximately $3.15-3.24) per kg (excluding GST), 34 count combed cotton yarn at ₹274-281 (approximately $3.27-3.35) per kg, 40 count combed cotton yarn at ₹289-294 (approximately $3.45-3.51) per kg, 30 count carded cotton yarn at ₹239-246 (approximately $2.85-2.93) per kg, 34 count carded cotton yarn at ₹248-252 (approximately $2.96-3.01) per kg and 40 count carded cotton yarn at ₹252-258 (approximately $3.01-3.08) per kg.

In Gujarat, cotton prices rose by ₹500 per candy of 356 kg due to a scarcity of supplies. Traders noted that mills are demanding cotton at higher prices, but supply remains limited due to adverse weather conditions. A recent hike in cotton auction prices by the Cotton Corporation of India (CCI) also supported market prices. Reports indicate damage to the new cotton crop due to rains and floods in major cotton-producing states, particularly Gujarat. Cotton supply in Gujarat and Maharashtra has been minimal due to heavy rains.

The all-India cotton arrival was estimated at no more than 4,000-5,000 bales of 170 kg each. The benchmark Shankar-6 cotton was quoted between ₹57,500-58,000 (approximately $685.71-$691.67) per candy of 356 kg, while southern mills sought to buy cotton at ₹58,500-59,000 (approximately $685.71-$697.64) per candy.