Lower arrival of cotton to change dynamics in south Indian yarn market

Traders said that fabric manufacturers will come back to the market as they will have to stock cotton yarn for consumption in further months, as otherwise they will face difficulty in finding yarn supplies on spot basis in the coming months. Spinning mills are likely to increase yarn prices because of lower cotton supplies. They are also reducing cotton yarn production.

Mumbai market remained bearish today because of poor spot demand. Prices of cotton yarn of various counts declined by ₹2-3 per kg. But traders said that the market is expected to bottom out very soon.

In Mumbai market, 60 count carded cotton yarn of warp and weft varieties were traded at ₹2,085-2,135 and ₹1,940-2,000 per 5 kg (GST extra) respectively. Carded cotton yarn (44/46 count) of warp variety was traded at ₹1,930-1,990 per 5 kg. 80 count carded cotton yarn of weft variety was sold at ₹2,070-2,100 per 4.5 kg. 40 count carded cotton yarn (warp) was sold at ₹350-355 per kg. 40 count combed yarn (warp) was priced at ₹400-420 per kg.

Tiruppur market witnessed improvement in demand, but yarn prices remained stable. According to traders, buyers came back in the market but were asking at lower prices as yarn prices had declined in previous week. A prominent trader Purushottam Gupta told Fibre2Fashion, “Spinning mills are reducing cotton yarn production. Higher cost of natural fibre will push up yarn prices. Buyers are taking interest for fresh buying.”

In Tiruppur, cotton yarn prices remained stable, but may go upwards in the coming week. 30 count combed cotton yarn was traded at ₹390-400 per kg, 34 count combed at ₹400-410 per kg and 40 count combed at ₹425-435 per kg (GST extra). Cotton yarn of 30 count carded was sold at ₹360-370 per kg, 34 count carded at ₹365-375 per kg and 40 count carded at ₹385-390 per kg, according to Fibre2Fashion’s market insight tool TexPro.

In the global market, ZCE cotton yarn May 2022 futures traded down by CNY 430 to CNY 26,685 per ton and September 2022 traded lower by CNY 635 at CNY 27,290 per MT today. ZCE cotton May contract lost CNY 60 to CNY 21,535 per MT and September contract traded down by CNY 185 at CNY 21,110 per MT. ICE Cotton futures managed to get over initial demand fears from the major consuming nation China, to close Monday’s session higher as the spot May contract entered delivery period that sparked late covering in the market. ICE May cotton settled at 141.41 cents, up 1.95 cents; July closed at 135.41 cents, down 0.44 cent; and December finished at 118.28 cents, 0.88 cent lower.

In Gujarat, cotton prices softened for the sixth consecutive day on Tuesday due to weak demand from mills, while daily arrivals remained steady. A grade cotton traded at ₹93,500 to 94,500 per candy of 356 kg, B grade cotton at ₹93,000 to 93,500 per candy and average grade cotton at ₹92,000 to 92,500 per candy. V797 variety was quoted at ₹48,000 to 50,000 per candy.

Fibre2Fashion News Desk (KUL)