Owing to significant improvement in demand from fabric manufacturers and powerlooms, prices of few varieties of cotton yarn breached the Rs. 400 per kg mark in South India. According to market sources, garment manufacturers are getting better orders from retailers and brands due to improvement in demand for summer clothing, as mercury has started to rise. The increase in price of cotton, which is now hovering above Rs. 90,000 per candy of 356 kg, has also supported price rise of cotton yarn.
However, yarn demand for export market is still weak, according to Purushottam Gupta, a trader from Tiruppur, where all the major varieties of cotton yarn gained Rs. 5-10 per kg. 30 count combed cotton yarn was traded at Rs. 365-380 per kg, 34 count combed at Rs. 85-395 per kg, and 40 count combed at Rs. 400-415 per kg. Cotton yarn of 30 count carded was sold at Rs. 325-340 per kg, 34 count carded at Rs. 340-350 per kg, and 40 count carded at Rs. 350-360 per kg, according to market insight tool TexPro.
Trade sources from Mumbai said that mills have increased yarn prices because of costlier cotton. Buyers are coming ahead for fresh buying despite demand for cash payment from the sellers. A broker said that buyers are getting deals on cash payment which shows better demand and ease in liquidity crunch. Cotton yarn prices increased by Rs. 10-20 per kg as spinning mills have increased offer prices. There was a sense of better confidence among fabric manufacturers and powerloom owners for higher demand from downstream industry.
In Mumbai market, yarn prices increased by Rs. 10-20 per kg due to increase in cotton prices. 60 count carded cotton yarn of warp and weft varieties were traded higher at Rs. 2,150-2,200 and 2,000-2,050 per 5 kg respectively. Carded cotton yarn (44/46 count) of warp variety was traded at Rs. 2,040-2,080 per 5 kg. 80 count carded cotton yarn of weft variety was sold at Rs. 2,250-2,300 per 4.5 kg. 40 count carded cotton yarn (warp) was sold at Rs. 375-300 per kg.
In the global market, ZCE cotton yarn May 2022 futures traded lower by CNY 330 at CNY 28,545 and September contract traded down by CNY 225 at CNY 28,650 per MT today. ZCE cotton March lost CNY 115 to CNY 21,755 per MT and May contract traded down by CNY 85 to CNY 21,100 per MT.
Meanwhile, ICE cotton futures closed with mixed session on Monday, with the old crop higher than new crop. Cotton contract for May 2022 closed at 139.07 cents, up 317 points; July 2022 closed at 135.31 cents, up 296 points; December 2022 closed at 111.3 cents, down 44 points. “We are seeing extreme volatility in the cotton market,” said an analyst, attributing the pullback to profit-taking after prices shot up nearly six cents. “The demand is really good for the old crop and on the new crop we have severe drought conditions in the West Texas. However, the fundamentals are still intact,” the analyst added.
In Gujarat market, cotton prices were firm on Tuesday amid continued buying by mills, while daily arrivals declined. Grade cotton was priced at Rs. 91,000-92,000 per candy, B grade cotton at Rs. 90,000-91,000 per candy and average grade cotton at Rs. 88,000-89,500 per candy. New cotton of V797 variety was sold at Rs. 48,500-51,000 per candy.
