Sign in | Join free

India cotton yarn prices fall as demand slows

India cotton yarn prices fall as demand slows Source:
Date: 22-10-2013
Visits: 347
Very Poor

The prices have fallen mainly due to a fall in demand from fabric makers. A huge inventory pile-up has prompted buyers to go slow on fresh purchases.
Cotton yarn prices have declined five-seven per cent in the past fortnight, owing to high inventory and low demand. Sources said the recent fall in yarn prices could also be attributed to a fall in cotton prices.
“Yarn prices have fallen mainly due to the fall in demand from fabric makers. A huge inventory pile-up has prompted buyers to go slow on fresh purchases. Also, cotton prices have fallen by about Rs 3,500 a candy (each of 356 kg) since mid-September,” said K Selvaraju, secretary general, Southern India Mills’ Association. On September 15, combed yarn prices had touched a high of Rs 281 a kg; now, the price stands at Rs 261 a kg. Hanked yarn prices have fallen from Rs 1,115 a bundle (each of 4.54 kg) in mid-September to Rs 1,085 a bundle.
Traders expect prices to fall further, as there is an inventory pile-up of 160 million kg. “China has almost stopped cotton yarn imports. It may be waiting for Indian yarn prices to stabilise at lower levels. But that seems unlikely before November,” said Arun Dalal, a leading cotton trader and industry expert.
The government's decision to do away with cotton yarn export benefits under the focus market scheme (FMS), has also hit exports. “The FMS was to reduce our dependence on China and explore new markets. The government's decision to withdraw the scheme has adversely affected trade,” said a miller based in Andhra Pradesh.
Sources say the government's decision to withdraw benefits under the FMS scheme was unwarranted. “There was no shortage; on the contrary, the stock is 20 per cent more than last year. Also, on a year-on-year basis, cotton prices have increased more than yarn prices,” said Selvaraju. He added cotton prices had increased by Rs 44 a kg in the past year, against the Rs 28-a-kg rise in yarn prices.
“There is an alternative of synthetic yarn. When cotton yarn prices jumped to peak levels in September, many garment buyers increased their purchase of synthetic yarn, as crude imports became cheaper with the rupee appreciating from its low levels,” said Dalal.
However, there is a silver lining for yarn traders and millers. Industry estimates suggest this year, China might not buy cotton from India. As a result, the demand for yarn may rise. Currently, about 40-50 per cent of India's yarn exports are accounted for by China.
like 225 Unlike 25
Users Comments
No comments to display
Are you sure you want to delete this comment.
Add your comment
User Name:
Email: Will not be published
Rate This article:
Maximum 3500 characters
Your name
Your email address
Your friend email address
  • /images/ourservices/125-600/pricetrend.jpg
  • /images/ourservices/125-600/product.jpg
  • /images/ourservices/125-600/videos.jpg
Suntex Asia Limited
32367 Users
have already joined Shouldn't you?
Full registration will provide you access to all our free services. It takes only one minute and it is free Go here
Quick registration (it's free)
Accesss to some of our free services
Select membership
Full Name
User Name
Enter the code
(Note: If you can't read the letters, reload the page to generate a new one.)
terms and conditions
Members Login
Already registered
Forgot your password
golden fees
Enter your e-mail address
Choose your room