Tariff issue adds worries for South India cotton yarn; prices steady

07 Mar '25

4 min read

Tariff issue adds worries for South India cotton yarn; prices steady

Pic: Adobe Stock

Insights

South India's cotton yarn demand slowed further amid tariff concerns, with prices remaining stable.
Export uncertainty due to US President Trump's announcement of reciprocal tariffs from April 2 has made buyers cautious.
Labour shortages and excess fabric stocks have also impacted the market.
In Gujarat, cotton prices saw volatility, recovering partially after steep losses.

Cotton yarn demand continued to slow in the South Indian market, with recent tariff issues adding to concerns. However, cotton yarn prices remained largely stable over the past week. Market experts noted growing apprehensions about the impact on India’s garment exports to the US following President Donald Trump’s announcement of imposition of reciprocal tariffs with effect from April 2. Cotton yarn was already facing headwinds due to payment constraints and the financial year-end in March. Trade sources indicated that the market remains heavily reliant on domestic demand, as Indian textile mills struggle to sustain production without strong export orders.

The Mumbai market saw stable prices across various counts and varieties of cotton yarn, but demand from the weaving industry remained sluggish. A trader from the Mumbai market told Fibre2Fashion, “Looms are running at 60 per cent capacity, and this may decline further due to limited fabric buying. Labour shortages have reduced cotton yarn production, while excess fabric stock has prevented prices from rising. The tariff issue has further dampened market sentiment.”

In Mumbai, 60-carded yarn of warp and weft varieties were traded at ₹1,420-1,450 (approximately $16.34-$16.69) and ₹1,310-1,350 per 5 kg (approximately $15.08-$15.54) (excluding GST), respectively. Other prices include 60 combed warp at ₹314-318 (approximately $3.61-$3.66) per kg, 80-carded weft at ₹1,420-1,480 (approximately $16.34-$17.03) per 4.5 kg, 44/46-carded warp at ₹263-268 (approximately $3.03-$3.08) per kg, 40/41-carded warp at ₹250-255 (approximately $2.88-$2.94) per kg and 40/41 combed warp at ₹266-270 (approximately $3.06-3.11) per kg, according to trade sources.

In Tiruppur, cotton yarn demand was also weak, particularly in the export segment, though prices remained unchanged over the past week. According to market sources, concerns over tariff-related announcements from the Trump administration have made buyers hesitant, preferring to wait for more clarity and stability in US trade policies. The high level of domestic cotton yarn production cannot be fully absorbed by the Indian market alone, making export demand crucial.

In Tiruppur, knitting cotton yarn prices were noted as: 30 count combed cotton yarn at ₹255-263 (approximately $2.94-3.03) per kg (excluding GST), 34 count combed cotton yarn at ₹264-271 (approximately $3.04-3.12) per kg, 40 count combed cotton yarn at ₹276-288 (approximately $3.18-3.31) per kg, 30 count carded cotton yarn at ₹235-240 (approximately $2.70-2.76) per kg, 34 count carded cotton yarn at ₹240-245 (approximately $2.76-2.82) per kg and 40 count carded cotton yarn at ₹248-253 (approximately $2.85-2.91) per kg.

Meanwhile, in Gujarat, cotton prices experienced significant volatility over the past week. Prices recovered partially after steep losses in the previous days. Domestic cotton prices had dropped sharply following a decline in ICE futures and other global markets after the announcement of tariffs on China, Mexico and Canada being implemented from March 4. Cotton was traded at a loss of ₹400-500 per candy (356 kg). Traders reported that demand from spinning mills has weakened further as uncertainty continues to affect the entire textile value chain.

Cotton arrival was estimated to 18,000-20,000 bales (of 170 kg each) in Gujarat and 100,000-105,000 bales across the country. The benchmark Shankar-6 cotton was quoted between ₹52,500-53,000 (approximately $604.27-$610.02) per candy of 356 kg, while southern mills were looking to buy cotton at ₹53,500-54,000 (approximately $615.78-$621.53) per candy. Seed cotton (Kapas) was traded at around ₹7,400-7,500 (approximately $85.17-$86.32) per quintal.