South India cotton yarn steadies after MSP hike, buying increases

21 Jun '24

3 min read

South India cotton yarn steadies after MSP hike, buying increases

Pic: Adobe Stock

Insights

South Indian cotton yarn prices remained stable, with increased demand anticipated due to a recent MSP hike.
Mumbai and Tiruppur markets saw higher lifting of cotton yarn, and mills and stockists are trying to raise prices.
Buyers are rushing to purchase, expecting no further price declines.
Trade sources predict a gradual improvement in textile demand.

South Indian cotton yarn prices remained stable, with no further easing anticipated due to expected higher demand. Both the Mumbai and Tiruppur markets observed increased lifting of cotton yarn following the recent hike in the minimum support price (MSP). According to traders, mills and stockists are attempting to raise cotton yarn prices, but it remains to be seen if the markets will absorb this increase in the coming days. Buyers are rushing to secure cotton yarn, anticipating no further price declines. Trade sources predict a gradual improvement in demand across the textile value chain, particularly from the garment industry, with expectations of higher market demand in July 2024.

Cotton yarn prices remained steady in Mumbai, not experiencing further decline after easing at the beginning of the week. The MSP hike has altered market sentiments. However, buyers do not expect cotton yarn prices to fall further. A trader from Mumbai told Fibre2Fashion, "Cotton yarn prices were stable in the market, but buyers are more likely to book larger quantities after the rise in cotton MSP. Seasonal demand may pick up next month, but we cannot expect a sudden increase in buying; it will improve gradually."

In Mumbai, 60 carded yarn of warp and weft varieties were sold at ₹1,375-1,420 (approximately $16.88-$17.47) and ₹1,220-1,300 per 5 kg (approximately $15.32-$16.28) (excluding GST), respectively. Other prices include 60 combed warp at ₹322-327 (approximately $3.94-$3.99) per kg, 80 carded weft at ₹1,300-1,340 (approximately $16.28-$16.76) per 4.5 kg, 44/46 carded warp at ₹250-256 (approximately $3.08-$3.14) per kg, 40/41 carded warp at ₹247-255 (approximately $3.02-$3.11) per kg and 40/41 combed warp at ₹285-290 (approximately $3.47-$3.53) per kg, according to trade sources.

The Tiruppur market also noticed steadiness in cotton yarn prices. Mills and stockists wanted to increase cotton yarn prices, but whether the market will accept the rise depends on garment demand. Cotton yarn buying improved in the last few days but will sustain only if garment manufacturing picks up.

In Tiruppur, knitting cotton yarn prices were noted on Thursday as 30 count combed cotton yarn at ₹264-270 (approximately $3.20-3.27) per kg (excluding GST), 34 count combed cotton yarn at ₹274-279 (approximately $3.30-3.36) per kg, 40 count combed cotton yarn at ₹285-290 (approximately $3.45-3.53) per kg, 30 count carded cotton yarn at ₹239-246 (approximately $2.87-2.92) per kg, 34 count carded cotton yarn at ₹244-249 (approximately $2.87-2.93) per kg and 40 count carded cotton yarn at ₹249-255 (approximately $3.00-3.06) per kg.

In Gujarat, cotton prices improved by ₹400 per candy of 357 kg after a hike in the minimum support price by the government. Ginners were quoting higher prices after slightly better trade enquiries, although ICE cotton was not supportive as it traded lower on Thursday. A trader from Gujarat said that the market received a psychological boost after the MSP hike, although it cannot raise the prices of cotton grown last season. Ginners were receiving higher trade enquiries from spinning mills. If yarn prices improve, the market can see further gains in the coming weeks.

Cotton arrivals were recorded at 9,000-10,000 bales of 170 kg in Gujarat, with all-India arrivals estimated at 32,000-35,000 bales. In Gujarat, the benchmark Shankar-6 cotton was quoted between ₹56,000-56,200 (approximately $665.45-$669.04) per candy of 356 kg, while southern mills were looking to buy cotton at ₹57,500-57,700 (approximately $676.23-$682.21) per candy.