Rising cotton prices squeeze yarn margins in south India

The Tiruppur market is expected to see an increase in cotton yarn prices as mills raise selling rates. Although demand from the downstream industry remains sluggish, the rising cost of cotton is supporting yarn prices. A trader from Tiruppur told Fibre2Fashion, “Cotton prices have increased by 3–4 per cent in the last two weeks. However, yarn prices have remained stable, resulting in losses for spinning mills. They have reduced discounts to protect their margins. Cotton yarn market prices may increase in the coming weeks.”

In Tiruppur, knitting cotton yarn prices were noted as 30 count combed cotton yarn at ₹255-263 (~$2.97-3.07) per kg (excluding GST), 34 count combed cotton yarn at ₹266-273 (~$3.10-3.18) per kg, 40 count combed cotton yarn at ₹278-291 (~$3.24-3.39) per kg, 30 count carded cotton yarn at ₹236-241 (~$2.75-2.81) per kg, 34 count carded cotton yarn at ₹241-246 (~$2.81-2.87) per kg and 40 count carded cotton yarn at ₹249-253 (~$2.90-2.95) per kg.

The Mumbai market also experienced sluggish demand and stable cotton yarn prices. President Donald Trump’s policies are frustrating local traders, as the prevailing uncertainty is dampening demand for cotton yarn. One trader remarked that Trump is losing influence by frequently changing his stance. Although the market is uncertain due to a lack of tariff clarity, traders are no longer reacting as sharply to his statements as they once did. According to market sources, rising cotton prices and weak demand are currently offsetting each other, keeping yarn prices stable.

In Mumbai, 60 carded yarn of warp and weft varieties were traded at ₹1,380-1,430 (~$16.08-16.67) and ₹1,340-1,390 per 5 kg (~$15.62-16.20) (excluding GST), respectively. Other prices include 60 combed warp at ₹315-321 (~$3.67-3.74) per kg, 80 carded weft at ₹1,385-1,450 (~$16.14-16.90) per 4.5 kg, 44/46 carded warp at ₹265-272 (~$3.09-3.17) per kg, 40/41 carded warp at ₹248-255 (~$2.89-2.97) per kg and 40/41 combed warp at ₹268-272 (~$3.12-3.17) per kg, according to trade sources.

In Gujarat, cotton prices rose further by ₹200–300 per maund (356 kg). Private trade in cotton yarn remained limited, as ginners and stockists hold very little stock. The Cotton Corporation of India (CCI) is selling cotton at auction on its terms, with the market largely following CCI’s pricing strategy. Traders reported that cotton prices are rising as CCI continues to increase auction prices. Over the past 15 days, CCI has raised base auction rates by 4–5 per cent. Not only spinning mills but also multinational companies and traders are purchasing cotton through CCI auctions. These non-consumer buyers plan to resell cotton at their preferred price points.

Cotton arrivals fell to 3,000–4,000 bales in Gujarat and 12,000–13,000 bales across all Indian states. The benchmark Shankar-6 cotton was quoted at ₹56,500–56,700 (~$658.52–660.85) per candy (356 kg) for stock cotton. Southern mills are mainly sourcing cotton from CCI due to limited availability in the private market.

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.

ALCHEMPro News Desk (KUL)