Yarn demand likely to go up as cotton arrival dries up in north India

Gulshan Jain, a trader from Ludhiana told Fibre2Fashion that cotton arrival is drying up gradually. Spinning mills have already reduced cotton production. They are focusing on production of thinner yarn to cut cotton consumption. Traders feel that lower supply of cotton will encourage buyers for stocking. The sentiment can turn to positive after May 10. But current demand has not improved yet in local yarn market because of poor lifting from weaving and garment industry.

In Ludhiana, cotton yarn prices were unchanged as mills were not ready to cut prices. 30 count cotton combed yarn was sold at ₹415-420 per kg (GST Inclusive). 20 and 25 count combed yarn were traded at ₹380-390 per kg and ₹405-410 per kg respectively. Carded yarn of 30 count was quoted at ₹390-400 per kg, according to Fibre2Fashion’s market insight tool TexPro.

Trade sources from Delhi market said that currently fabric manufacturers are buying cotton yarn just for immediate consumption. The demand is not very encouraging, and stockists and traders are selling from their stocks. Delhi market noted steady prices in yarn amid weaker demand. In Delhi market, 30 count combed yarn was traded at ₹390-410 per kg (excluding GST), 40 count combed at ₹435-450 per kg, 30 count carded at ₹365-375 per kg and 40 count at ₹405-415 per kg.

Panipat’s textile industry is facing short supply of comber (cotton waste) which is used extensively in local furnishing industry. Rugs and old clothes are also short in supply due to disruption in imports from Europe which is a major supplier of the raw material. Power shortage since the last 8-10 days is leading to lower production of recycled yarn. However, according to traders, yarn prices are not getting support despite limited supplies because of weaker demand from downstream industry. In Panipat market, 10s recycled yarn (white) was traded at ₹105-115 per kg, 10s recycled yarn (coloured - high quality) at ₹130-140 per kg, 10s recycled yarn (coloured - low quality) at ₹90-100 per kg and 20s recycled PC yarn (coloured) at ₹170-180 per kg. 10s optical yarn was traded at ₹125-130 per kg in the market (excluding GST).

In the global market, ZCE cotton yarn May 2022 futures traded up by CNY 155 to CNY 26,910 per ton and September 2022 sold higher by CNY 560 at CNY 27,780 per MT today. ZCE cotton May gained CNY 175 to CNY 21,710 per MT and September contract traded up by CNY 370 to CNY 21,495 per MT. ICE Cotton futures witnessed a sharp recovery in prices, hitting a limit-up, led by supportive technical and surge in equity markets. ICE June contract increased by 5 cents to 140.68 cents per pound, while December contract traded higher by 3.68 cents to 122.39 cents per pound.

In Gujarat, cotton prices gained ₹400-500 per candy of 356 kg on Thursday amid increased demand from spinning mills, while daily arrival also improved. In Punjab, cotton spot delivery rates were quoted at ₹93,000 to 94,000 per candy. In Haryana, cotton was sold at ₹91,500 to 93,700 per candy. In Upper Rajasthan, cotton was priced at ₹93,500 to 94,000 per candy. In Lower Rajasthan, cotton was traded at ₹89,000 to 92,000 per candy.

Fibre2Fashion News Desk (KUL)