Labour shortage adds to sluggish demand for cotton yarn in south India

Cotton yarn prices remained steady today in southern and western India’s markets despite costlier natural fibre. Mill owners were trying to raise cotton yarn prices but failed due to weaker demand from the downstream industry. According to traders, demand from downstream value chain is not improving from both domestic and export markets.

A broker from Mumbai told Fibre2Fashion that large number of powerlooms are already being run on partial capacity due to poor demand from garment units. Yarn demand weakened further because of labour shortage.

In the Ahmedabad-Surat region, millers quoted higher prices than market rate by around ₹5-7 per kg. But cotton yarn market rate did not see any change over the last couple of days.

The knitwear hub of Tiruppur also witnessed poor demand. According to market sources, demand is very thin from domestic market as summer demand is yet to pick up. Exporters’ demand is also unable to support the market sentiment. A trader from Tiruppur market said that yarn demand is not likely to improve in February. “We can expect better demand in March only.”

In Mumbai market, 60 count carded cotton yarn of warp and weft varieties were traded at ₹1,930-1,990 per 5 kg and ₹1,670-1,730 per 5 kg respectively. 80 count carded cotton yarn of weft variety was sold at ₹1,860-1,900 per 4.5 kg. Carded cotton yarn (44/46 count) of warp variety was traded steady at ₹1,720-1,740 per 5 kg.

Cotton yarn of 30 count combed was traded in Tiruppur at ₹390-400 per kg, 34 count combed at ₹400-410 per kg and 40 count combed at ₹ 420-430 per kg. Cotton yarn of 30 count carded was sold at ₹360-370 per kg, 34 count carded at ₹370-380 per kg and 40 count carded at ₹405-415 per kg, according to Fibre2Fashion’s market analysis tool TexPro.

In the global market, ZCE cotton yarn May 2022 futures traded higher by CNY 130 at CNY 29,145 per ton and September 2022 traded higher by CNY 50 at CNY 28,500 per MT today. ICE cotton futures edged lower on Thursday amid weak export sales data by the US Department of Agriculture (USDA). Cotton contract for March 2022 closed at 125.66 cents, down 77 points; May 2022 closed at 123.2 cents, down 60 points; December 2022 closed at 105.27 cents, down 34 points. A trade analyst said, “I think the weekly sales report was neutral to slightly bearish. The combined sales were a good number, although it’s not as good as the last four weeks.”

Meanwhile, cotton prices remained stable in the Karnataka and Gujarat on Friday amid limited demand from spinning mills and stable arrivals. The market had seen upward trend in last two sessions. In Karnataka, 31 mm RD 75 variety cotton was traded at ₹80,500-82,500 per candy of 356 kg, 30 mm RD 75 variety at ₹79,000-80,500 per candy and 29 mm RD 75 variety at ₹77,000-78,000 per candy. In Gujarat, 29 mm cotton was traded at ₹78,000-78,500 per candy. A grade cotton was sold at ₹77,000-78,000 per candy, B grade variety at ₹76,000-77,000 per candy and average grade at ₹75,500-76,000 per candy. Cotton of V797 variety was quoted at ₹50,000-51,000 per candy.

Fibre2Fashion News Desk (KUL)