South Indian yarn prices stable; rising cotton costs create disparity

10 Sep '24

3 min read

South Indian yarn prices stable; rising cotton costs create disparity

Pic: Adobe Stock

Insights

Cotton yarn prices in south India remained stable amid moderate demand, with Tiruppur maintaining last week's price increase, though further rises are unlikely.
Mumbai saw sluggish demand due to weak retail demand and fabric underperformance.
Spinning mills are facing pressure from rising cotton costs and limited demand, both domestically and for export.

Cotton yarn prices in south India remained stable amid moderate demand. The Tiruppur and Mumbai markets witnessed slow demand from the downstream industry. Last week, Tiruppur saw a price increase in cotton yarn. According to trade sources, the recent rise in cotton prices has created a disparity for spinning mills, as they are unable to pass on the higher production costs. However, Tiruppur has managed to maintain the previous week’s price rise. Traders are optimistic that demand will improve in the coming weeks.

In Tiruppur, cotton yarn prices remained steady with moderate demand from fabric manufacturers. Prices had increased due to the higher cost of natural fibre. A Tiruppur-based trader told Fibre2Fashion, "The market has experienced average demand but managed to retain last week’s price increase. However, a further price hike is not viable at this stage. Both domestic and export demand for cotton yarn remains limited, but better demand is expected in the coming weeks."

In Tiruppur, knitting cotton yarn prices were noted as 30 count combed cotton yarn at ₹268-276 (approximately $3.19-3.29) per kg (excluding GST), 34 count combed cotton yarn at ₹277-284 (approximately $3.30-3.38) per kg, 40 count combed cotton yarn at ₹290-296 (approximately $3.45-3.52) per kg, 30 count carded cotton yarn at ₹242-249 (approximately $2.88-2.97) per kg, 34 count carded cotton yarn at ₹251-255 (approximately $2.99-3.04) per kg and 40 count carded cotton yarn at ₹255-262 (approximately $3.04-3.12) per kg.

In the Mumbai market, cotton yarn prices were also stable, but the garment industry continues to face sluggish demand from retailers, leading to underperformance in the fabric sector. Cotton yarn demand has remained weak, and according to market sources, the recent rise in cotton prices has further pressured mill margins. The disparity in cotton production is a significant challenge for spinning mills.

In Mumbai, 60 carded yarn of warp and weft varieties were sold at ₹1,390-1,450 (approximately $16.55-$17.27) and ₹1,280-1,380 per 5 kg (approximately $15.24-$16.43) (excluding GST), respectively. Other prices include 60 combed warp at ₹318-322 (approximately $3.79-$3.83) per kg, 80 carded weft at ₹1,310-1,350 (approximately $15.60-$16.08) per 4.5 kg, 44/46 carded warp at ₹246-262 (approximately $2.93-$3.12) per kg, 40/41 carded warp at ₹241-249 (approximately $2.87-$2.97) per kg and 40/41 combed warp at ₹280-285 (approximately $3.33-3.39) per kg, according to trade sources.

In Gujarat, cotton prices eased by ₹400-500 per candy of 356 kg in the past few days, driven by weaker ICE cotton prices and pessimism in the textile industry. Traders noted that spinning mills are struggling with price disparity, as they cannot raise yarn prices due to weak demand. The recent rise in cotton prices has deterred buyers, and reports of crop damage due to heavy rains in central and southern states have further impacted the market.

Cotton arrivals across India were estimated at 5,000-6,000 bales of 170 kg each. The benchmark Shankar-6 cotton was quoted between ₹59,500-60,000 (approximately $708.52-$714.48) per candy of 356 kg, while southern mills were looking to buy cotton at ₹60,500-61,000 (approximately $720.43-$726.39) per candy.