Cotton yarn prices in India rose by more than 20% as cotton prices soared to record highs.
According to OP Gulia, Senior Vice President CEO, Global Ventures, in the past three months, the prices of premium 40-count yarn and 60-count yarn have increased from Rs 330/kg to Rs 405/kg and from Rs 415/kg to Rs. 500 rupees/kg.
Prices of S-6 cotton, which is the benchmark for exports, were quoted at Rs 65,000-65,300/kander over the weekend. At the Rajkot agricultural market in Gujarat, the price of seed cotton was Rs 8,300 per quintal. Indian prices follow global trends as domestic production and supplies decline. Yarn prices fluctuate in line with demand from the cotton and apparel industries. Domestic demand for apparel in India has shown a growth trend after the lifting of epidemic restrictions, and yarn prices have kept pace with rising cotton prices.
However, the Federation of Indian Textile Industry said that since October last year, cotton prices have increased by 80%, but 40-count yarn has only increased by 58% during the same period. The agency said that while prices of cotton hybrid varieties (DCH) popular in south India increased again by 126%, prices of 80-count yarn increased by only 38%.
According to Indian industry bodies, despite rising cotton prices, orders from spinning mills are queued up to 45 days. As demand for yarn increases, so do advance orders. Therefore, spinners are currently in a good position. Spinners are now looking to supplement cotton demand in the next 2-3 months due to strong domestic demand for natural fibers. Now, nearly 150,000 bales of new cotton are on the market in India every day, and the quality has also improved. Spinners currently have sufficient cotton stocks.
The Confederation of Indian Textile Industry said spinning mills are still making some profits even at current cotton prices due to strong demand from the apparel industry due to open travel and market restrictions. However, Indian cotton exports have slowed due to strong domestic demand and fast payment cycles. At present, most textile companies are catering to the domestic market. In terms of exports, Vietnam and China are the largest buyers of Indian cotton yarn, followed by the European Union and Turkey.
According to the agency’s data, India’s yarn exports were 1.231 billion kilograms in the last fiscal year, a 22% increase from 1.006 billion kilograms in 2019-20. In the first half of this fiscal year, India’s cotton yarn exports were 690 million kilograms.
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