Payment issues in south India's cotton yarn; fabric demand offers hope

The Mumbai market witnessed a bearish tone in cotton yarn trade as buyers were cautious about fresh purchases. They are facing payment issues as everyone wants to focus on clearing payments due to obligations to small and micro enterprises. However, cyclic slow buying is also considered a responsible factor. A trader from the Mumbai market told Fibre2Fashion, “Currently, cotton yarn demand is slow due to the payment crisis. Power loom owners may come back for buying as they are getting better than average fabric demand. They will buy cotton yarn when they consume their present stock for fabric production. But strong demand can be expected in case of an ease in payment flow.”

In Mumbai, 60 carded yarn of warp and weft varieties were traded at ₹1,440-1,480 (~$16.59-$17.16) and ₹1,330-1,370 per 5 kg (~$15.32-$15.79) (excluding GST), respectively. Other prices include 60 combed warp at ₹328-332 (~$3.78-$3.83) per kg, 80 carded weft at ₹1,440-1,500 (~$16.69-$17.28) per 4.5 kg, 44/46 carded warp at ₹262-272 (~$3.02-$3.13) per kg, 40/41 carded warp at ₹271-274 (~$3.12-$3.16) per kg and 40/41 combed warp at ₹278-284 (~$3.20-3.27) per kg, according to trade sources.

The Tiruppur market also faced weak demand for cotton yarn. However, cotton yarn was traded at the present level. According to market sources, domestic demand is very weak. Summer garmenting should pick up these days, but payment constraints have reduced the buying capacity of the consumer industry. Presently, cotton yarn is surviving on export demand as the falling rupee against the US dollar has provided much-needed relief to compete in the global market.

In Tiruppur, knitting cotton yarn prices were noted as 30 count combed cotton yarn at ₹255-263 (~$2.94-3.03) per kg (excluding GST), 34 count combed cotton yarn at ₹264-271 (~$3.04-3.12) per kg, 40 count combed cotton yarn at ₹276-288 (~$3.18-3.32) per kg, 30 count carded cotton yarn at ₹235-240 (~$2.70-2.76) per kg, 34 count carded cotton yarn at ₹240-245 (~$2.77-2.82) per kg and 40 count carded cotton yarn at ₹248-253 (~$2.86-2.92) per kg.

In Gujarat, cotton prices gained by ₹200-300 per candy of 356 kg as the consumer industry and multinational companies are looking to purchase cotton even at higher prices. Although the Cotton Corporation of India (CCI) has assured to buy seed cotton from farmers at MSP, it has temporarily stopped procurement as it is facing a technical snag in the buying system. Traders said that MNCs and mills are buying cotton even at higher prices, but mills are still buying cotton only for immediate needs. They did not enter large buying mode as they are facing a liquidity crunch.

Cotton arrival was estimated to be 22,000-28,000 bales of 170 kg in Gujarat and 130,000-135,000 bales in the country. The benchmark Shankar-6 cotton was quoted between ₹53,000-53,500 (~$610.67-$616.43) per candy of 356 kg, while southern mills were looking to buy cotton at ₹54,300-54,600 (~$625.65-$629.11) per candy. Seed cotton (Kapas) was traded at around ₹7,475-7,625 (~$86.13-$87.86) per quintal.

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)