South India cotton yarn may face sell-off amid Bangladesh unrest

06 Aug '24

3 min read

[05:20 pm] Krati Dubey South India cotton yarn may face sell-off amid Bangladesh unrest

Pic: Adobe Stock

Insights

Cotton yarn prices remained stable in Mumbai and Tiruppur due to weak demand and a lack of positive market signals.
The turmoil in Bangladesh is expected to impact cotton yarn and fabric exports, potentially leading to a downturn in trade.
Despite steady cotton prices in Gujarat, domestic trade diverged from global trends due to higher MSP.

Cotton yarn prices in south India remained stable in Mumbai and Tiruppur, as the market did not receive any positive signals. Cotton yarn trade may experience a downward trend in the coming days, with selling pressure likely to increase due to the political unrest in Bangladesh. Cotton yarn and fabric exports may be halted for at least a few weeks. However, trade sources expect normalcy to return once a new interim government takes control of the country.

The Mumbai market witnessed stability in cotton yarn prices as the market struggled to see buying activity. Bharat Shah, a power loom owner from Maharashtra, told Fibre2Fashion, "Cotton yarn prices remained steady amid weak demand. There will be minimal impact on yarn and fabric exports to Bangladesh if the new interim government takes control promptly. Any delay in the process may hurt Indian exports of yarn and fabric to the nation.”

In Mumbai, 60 carded yarn of warp and weft varieties were sold at ₹1,330-1,370 (approximately $15.84-$16.32) and ₹1,180-1,260 per 5 kg (approximately $14.06-$15.01) (excluding GST), respectively. Other prices include 60 combed warp at ₹314-318 (approximately $3.74-$3.79) per kg, 80 carded weft at ₹1,270-1,310 (approximately $15.13-$15.61) per 4.5 kg, 44/46 carded warp at ₹242-258 (approximately $2.88-$3.07) per kg, 40/41 carded warp at ₹238-246 (approximately $2.84-$2.93) per kg and 40/41 combed warp at ₹278-283 (approximately $3.31-$3.37) per kg, according to trade sources.

The Tiruppur market also saw stability in cotton yarn prices. The market continued to see limited buying from the downstream industry, but this was not sufficient to support cotton yarn prices. Trade sources indicated that the turmoil in Bangladesh is expected to have a negative impact on the cotton yarn trade. The local market may face selling pressure as shipments to the neighbouring country will be disrupted for at least a few weeks.

In Tiruppur, knitting cotton yarn prices were noted on Thursday as: 30 count combed cotton yarn at ₹262-268 (approximately $3.12-3.19) per kg (excluding GST), 34 count combed cotton yarn at ₹272-277 (approximately $3.24-3.30) per kg, 40 count combed cotton yarn at ₹285-290 (approximately $3.39-3.45) per kg, 30 count carded cotton yarn at ₹237-244 (approximately $2.82-2.91) per kg, 34 count carded cotton yarn at ₹244-248 (approximately $2.91-2.95) per kg and 40 count carded cotton yarn at ₹248-254 (approximately $2.95-3.03) per kg.

In Gujarat, cotton prices remained steady despite a decline in ICE cotton, as domestic cotton trade diverged from the global trend. Traders noted that domestic cotton trade is disconnected from the global market due to different dynamics in the local market. A higher minimum support price (MSP) is expected to keep cotton prices on the higher side. Prospective additional buying by the domestic textile industry will also support cotton prices, as the industry may need more cotton if garment orders are diverted from Bangladesh due to the turmoil. However, current cotton demand was not supportive.

Cotton arrivals were recorded at 2,000-3,000 bales of 170 kg in Gujarat, with all-India arrivals estimated at 9,000-10,000 bales. The benchmark Shankar-6 cotton was quoted between ₹57,000-57,500 (approximately $679.00-$684.96) per candy of 356 kg, while southern mills were looking to buy cotton at ₹57,500-58,000 (approximately $684.96-$690.91) per candy.