Though shortage of good quality cotton is pushing cotton and yarn prices up, low cotton fabrics prices are pulling them down. Spinning mills along with their agents and dealers are desperately trying to get better prices from customers who, on the other hand, prefer to wait for prices to drop. Demand for premium apparels is at an all-time low, impacting demand for premium yarns too. Currently, carded and combed yarns are being sold at the same price with this trend likely to continue until the next festive season.

Demand for viscose, cotton remains healthy

However, soon massive pent-up demand is likely to erupt in the yarn market taking yarn prices to a level never-seen-before. Already, demand for viscose yarn and fabrics is growing at a healthy rate though their prices are controlled as most of these yarns are imported.

Demand for cotton sheeting fabrics is growing with most wider-width looms in India being packed till October and some even till December. The growing demand from denims as well as sheeting is also boosting the prices of open end yarns in India.

Rise in cotton, polyester prices; viscose unstable

Cotton and polyester fiber prices are trending up as are viscose. As their prices were depressed across all sectors, even a small increase seems like a surge. The prices of cotton carded yarns have slowed after an abnormal rise. The price of 30s combed knitting yarn have increased from Rs 170 ex-factory to Rs 176 ex-factory. However, as soon as exporters increase yarn prices, domestic manufacturers adopt a wait and watch policy instead of rushing into sales. Hence, merchant exporters receive orders of yarn booked at Rs 170 and Rs 172 too

This month, prices of 60s compact weaving yarn increased by Rs 5 over the last month only to trickle back down later. Similarly, prices of 32s carded weaving yarns also declined to less than Rs 170 ex-factory. On the contrary, there was a spike in demand for open end yarn. The prices of 10s OE yarns increased to Rs 102 while those of 16s OE yarns rose to Rs 110 exfactory.

Currently, 30s viscose yarn is being sold at Rs 154 and its price is expected to rise to Rs 158 before falling back again. However, the prices of viscose yarns remain unstable as manufacturers expect the government to levy duties on these soon. These duties may mute yarn demand for some time; however they will ultimately restore viscose to the premium category it once belonged to.

Demand picks up in overseas market

Demand for Indian yarn in Bangladesh is picking up with buyers sending inquiries again. The country plans to buy stock for September and October. However, Chinese buyers continue to demand lower prices. Buyers from Europe and Africa are buying decent quantities of yarn from India.

Currently, 16s carded yarn is being sold at $1.92 whereas 21s carded is trading at $2.02. 21 combed knitting from Gujarat is at $2.20. Earlier, 30s cotton knitting yarn was being sold at $2.35-$2.40 levels. However, now exporters are quoting $2.45 for this yarn.