Confusion over new payment rules slows south India's cotton yarn trade

A trader from Mumbai shared with Fibre2Fashion, "Buyers have remained silent regarding new purchases due to concerns about the new payment rules. Sellers are also reluctant to sell their stock as they lack assurance regarding payments under the new regime. No one is willing to engage in business until there is clarity regarding payments."

In Mumbai, 60 carded yarn of warp and weft varieties were sold at ₹1,425-1,450 and ₹1,310-1,380 per 5 kg (excluding GST), respectively. Other prices included 60 combed warp at ₹318-325 per kg, 80 carded weft at ₹1,400-1,440 per 4.5 kg, 44/46 carded warp at ₹254-263 per kg, 40/41 carded warp at ₹242-248 per kg, 40/41 combed warp at ₹264-268, and 30/32 carded warp at ₹232-237 per kg, according to Fibre2Fashion's market insight tool TexPro.

The Tiruppur market also experienced negligible trade due to confusion regarding payments. A trader from the Tiruppur market told F2F, "No one wants to take unnecessary risks under the new payment rules. While the government may have introduced the rule to facilitate micro and small enterprises, the current confusion surrounding the rule poses an immediate problem for traders who are also unsure if they are covered by the payment protection rule."

In the Tiruppur market, cotton yarn prices were noted as follows: 30 count combed cotton yarn at ₹258-262 per kg (excluding GST), 34 count combed cotton yarn at ₹265-270 per kg, 40 count combed cotton yarn at ₹280-284 per kg, 30 count carded cotton yarn at ₹233-236 per kg, 34 count carded cotton yarn at ₹238-243 per kg, and 40 count carded cotton yarn at ₹247-251 per kg, as per TexPro.

Cotton prices have increased by ₹400-500 per candy of 356 kg in the last couple of days due to slow arrivals and consistent buying in the Gujarat market. According to trade sources, ginners have been facing disparities between current seed cotton and cotton prices, leading them to slow down their purchases of seed cotton due to concerns about sustainability given current seed prices. Consequently, cotton arrivals have slowed down at a time when multinational corporations (MNCs) and spinning mills have been regularly purchasing cotton. The arrival season is in its final phase this year, and cotton arrivals are expected to further decrease in the coming weeks. The benchmark Shankar-6 cotton was quoted at ₹55,800-56,000 per candy of 356 kg, with southern mills intending to purchase cotton at ₹56,300-56,500 per candy. Gujarat witnessed an arrival of 38,000-39,000 bales of 170 kg, while the all-India arrival was estimated at 170,000-172,000 bales.

ALCHEMPro News Desk (KUL)