Nowadays, the cotton yarn trade remained weak in markets of southern India, because the spinners tried to maintain yarn prices at a higher level, but buyers were not willing to buy yarn at higher prices.
The matter is the weaving and garment industries are unable to find any takers for costlier products, also powerlooms are running at very low capacity.
However, powerloom owners and stockists are getting handsome profits on older stocks of previous lower costs.
According to a broker from Mumbai, “Power looms in Maharashtra are running with only 20-25 percent capacity as demand is very poor. Powerloom owners are not getting sufficient buying for costlier fabric. Instead, they were selling fabric from stocks which was produced on cheaper yarn.”
As per the trade sources, such stocks of lower cost are proven beneficial. For example, earlier, fabric which was priced at ₹25-30 per meter 12-18 month back, is now being sold at ₹50-60 per meter due to costlier cotton. But stockists’ cost is lower as it was produced from cheaper cotton yarn.
Cotton yarn prices remained stable in Tiruppur market also. Buyers are unwilling to buy fresh as downstream industry is not accepting costlier fabric, also uncertain demand scenario is discouraging buyers in the entire value chain.
In Tiruppur market, 30 count combed cotton yarn was traded at ₹430-440 per kg (GST extra), 34 count combed at ₹440-445 per kg and 40 count combed at ₹470-470 per kg. Cotton yarn of 30 count carded was sold at ₹390-400 per kg, 34 count carded at ₹405-415 per kg and 40 count carded at ₹415-425 per kg.
Besides, in the global market, ZCE cotton yarn May 2022 futures traded up by CNY 75 to CNY 26,675 per ton while September 2022 traded higher by CNY 70 at CNY 27,570 per MT today.
ZCE cotton May contract lost CNY 120 to CNY 21,345 per MT whereas September contract traded down by CNY 55 at CNY 21,220 per MT.
ICE cotton futures settled Monday’s session lower after high volatility between positive and negative zones, as sporadic buying deals provided optimism which was washed away by the dollar’s strength.
Cotton contract for July was down 0.68 cents to 142.93 cents per lb. December contract traded at US cent 123.63 per pound with loss of 0.11 cent.
In Gujarat, cotton prices strengthened for the second consecutive session on Tuesday due to increased demand from mills, while daily arrivals also improved.