By: D.Shanmuganandam
The South India Textile Research Association, Coimbatore

1. Introduction

The CPQ studies (costs, operational performance and yarn quality quarterly inter-mill studies), a pioneering service introduced by SITRA nine years ago (1997), have been well received by the mills. The participating mills have initiated a number of measures to reduce costs, change product-mix, improve productivity and realise high yarn prices. These studies have now become an integral part of SITRAs services to mills. Two studies are being conducted every year covering 2nd and 4th quarters.

Using the data furnished by the mills in the last 10 CPQ studies (Q2 2001 to Q4 2005), a detailed analysis has been made on the changes in yarn prices and cotton costs during the 5 year period.

2. Profile of the participant mills

Number of mills participated in each of the 10 studies ranged from 150 to 200. Of the total mills, about 80% of them are from South India and the rest are from other regions. Nearly 10% of the mills are export oriented units (EOUs) and close to one-half of them are exporting mills.

3. Changes in cotton yarn prices and cotton costs

Average cotton yarn prices and cotton costs prevailed during 2001-05 for some major counts, which are common for all the 10 studies, have been analysed to study the changes taken place during this period. The findings are given below for both domestic and export yarns.

3.1. Domestic yarn prices

During the last 5 years, overall price of domestic cotton yarns both for weaving and knitting has remained virtually unchanged (Table 1). The prices, however, ruled 7% to 18% higher (except 100s C) in the 2nd quarter of 2004 as compared to the 2nd quarter of 2001 and 3% to 27% higher (except 100s C) than the 4th quarter of 2005. Count-wise comparison of prices revealed a drop of about 7% in 20s and 1% to 3% fall in 40s, 30s CH and 40s CH yarns. On the other hand, prices showed an increase of 11% in 100s C and 4% in 60s C and a marginal rise of 1% to 2% in 30s and 40s C yarns (Figure 1).