Cotton yarn prices continue to rise in south Indian markets

In the knitwear hub of Tiruppur, spinning mills are reeling under extreme pressure of costlier cotton. Sources said that mill owners are seriously mulling to cut their production due to costly cotton and poor demand. A trader told Fibre2Fashion that recent price rise of cotton has made yarn production loss making, so mills can cut output. Earlier, mills could not increase yarn prices due to lower demand from domestic and global demand. Now domestic garment units are getting some demand, but costly yarn has made the things difficult. On the other hand, exporters are facing double pressure of higher cost of production and slower orders from international buyers because they don’t want to pay higher prices.

All the major varieties of cotton yarn gained ₹5-10 per kg in Tiruppur market. 30 count combed cotton yarn was traded at ₹360-370 per kg, 34 count combed at ₹370-375 per kg and 40 count combed at ₹390-405 per kg. Cotton yarn of 30 count carded was sold at ₹320-325 per kg, 34 count carded at ₹330-335 per kg and 40 count carded at ₹340-350 per kg, according to Fibre2Fashion’s market insight tool TexPro.

Trade sources from Mumbai said that cotton yarn prices increased by ₹50-90 per 5 kg as spinning mills have increased offer prices due to costlier cotton in domestic and international markets. Fabric manufacturers i.e., power loom owners are not able to increase prices of grey fabric because of slower demand from garment units. But spinning mills are not hesitating from price rise despite slower buying. Power loom owners feel that spinning mills are profiteering in the name of costlier cotton. They feel that mills have increased yarn prices disproportionately. Market brokers feel that current demand is better compared to February, so mills are increasing yarn prices, as they did not increase prices in last month in the absence of market support.

In Mumbai market, yarn prices increased ₹50-90 per 5 kg due to increase in cotton prices. 60 count carded cotton yarn of warp and weft varieties were traded higher at ₹2,000-2,070 per 5 kg and ₹1,810-1,860 per 5 kg respectively. Carded cotton yarn (44/46 count) of warp variety was traded at ₹1,830-1,870 per 5 kg. 80 count carded cotton yarn of weft variety was sold at ₹2,000-2,010 per 4.5 kg. 40 count carded cotton yarn (warp) was sold at ₹345-350 pe kg.

In the global market, ZCE cotton yarn May 2022 futures traded higher by CNY 165 at CNY 28,725 and September contract traded up by CNY 340 at CNY 28,050 per MT today. ZCE cotton March gained CNY 45 to CNY 21,640 per MT and May contract traded higher by CNY 140 to CNY 20,665 per MT.

ICE cotton futures posted triple digit gains on Monday, boosted by supply fears and demand prospects, as well as high oil prices. Cotton contract for May 2022 closed at 130.01 cents, up 315 points; July 2022 closed at 126.21 cents, up 318 points; December 2022 closed at 108.16 cents, up 292 points.

In Gujarat, the main cotton producing state in India, cotton prices rose for the third consecutive session on Tuesday amid continued buying by the mills, while daily arrivals were stable. Cotton prices in the global market are steadily rising, making cotton imports more expensive, resulting in an increase in the domestic market. The country’s cotton production estimate for the current season is projected to be lower than the industry’s second estimate. So, the overall arrival of kapas (seed cotton) in the current season has been lower than last year, leading to a lower balance stock of cotton with the spinning mills of the state. Therefore, cotton spot prices are expected to remain bullish for the time being. A grade cotton was sold at ₹82,000-83,000 per candy of 356 kg, B grade at ₹80,500-81,500 per cany, and the average grade cotton at ₹78,500-79,500 per candy. V797 variety cotton was quoted at ₹40,000-45,000 per candy.

ALCHEMPro News Desk (KUL)