According to feedback from some cotton yarn traders and weaving companies in Guangdong, Jiangsu and Zhejiang, etc., since late February, cotton yarn quotations from Indian yarn mills and exporters have gradually loosened and declined, with a range of about 5-10 rupees/kg (a few non-large manufacturers and non-branded yarn quotations have been reduced 10-15 rupees/kg (compared to combed yarn and high-count compact spinning yarn, carded yarn has a slightly larger correction space), echoing the recent peak and fall of Indian domestic S-6/J34 cotton spot and MCX futures.
A yarn mill in Gujarat with about 50,000 spindles stated that with the effective control of the COVID-19 epidemic in India in the third quarter of 2021, coupled with the U.S. government’s ban on imported Xinjiang-related products and the outbreak of the epidemic in Vietnam (cotton textile and clothing companies have reduced or suspended production on a large scale ), so the entire industrial chain such as yarn mills, weaving mills and clothing has not only recovered rapidly in terms of startup rate and equipment load, but also has a good order-taking situation. Not only has the company’s orders at the end of 2021 been scheduled to April 2022 (the leading products are C20S-C40S Carded, JC21-JC40S yarn), and buyers are required to place orders at least two months in advance and pay 10%-20% of the purchase price as a contract deposit.
However, in January and February of 2022, downstream weaving, clothing and foreign trade companies have reported that there are few new orders for cotton textiles and clothing. In addition, due to the substantial increase in cotton yarn FOB/CNF quotations, buyers from China, Bangladesh and other countries have reduced or even suspended purchases. , so the overstocking of cotton yarn became more and more serious, and yarn prices had to be lowered tentatively.
Although CAI has slightly increased India’s cotton output, CCI’s 2021/22 acquisitions are fully open, and India’s domestic seed cotton listing progress is still lagging significantly year-on-year, the war with Russia and Ukraine has increased the uncertainty of the global market, and India’s domestic cotton planting area in 2022 With expectations of substantial growth and concerns that cotton textile, clothing and other consumption may peak and fall significantly after the Federal Reserve, the European Union and other developed economies raise interest rates, foreign buyers, Indian domestic fabric mills and middlemen continue to be in a wait-and-see mode and are not People are eager to inquire and place orders, and the rising futures prices of crude oil, natural gas and other energy sources as well as chemicals, metals, agricultural products and other commodities have caused the cost of cotton yarn to only rise but not fall, and the profits of yarn mills have been significantly compressed.
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