24 Dec, 2010, 01.09AM IST, S Sujatha,ET Bureau
COIMBATORE: Rising cotton prices on the back of renewed exports have arrested the fall of cotton yarn prices . Further, it has also led to a bullish trend across the textile value chain.
All industry stakeholders are now trying to hold on to their stocks as the raw material prices are expected to remain high for quite sometime. “Even before yarn manufacturers could absorb the dropping cotton value, the prices have moved up again. So, it will be difficult to bring the yarn prices,” said Coimbatore-based KPR Mills managing director P Natraj.
The prices of finer count cotton yarn had fallen by around Rs 20-25 per kg while the coarser counts, mainly used by the knitwear manufacturers in Tirupur, are expected to fall by Rs 15-20 per kg in the first week of January as the prices are fixed on monthly basis. The warp yarn had fallen by Rs 10-15 per kg. The prices of 100’s count super fine cotton yarn, which was ruling at Rs 410 per kg during the peak period, has come down to nearly Rs 380-390 per kg. But now, the renewed bullish trend and the compulsions of spinning mills to buy cotton at the current levels due to depleting stocks have created a panic in the market.
The Southern India Mills Association secretary general K Selvaraju said that the yarn prices will now hold steady as the fabric prices too have started picking up. “There will be no change in yarn prices despite bringing it under restricted list. Yarn prices will come down only when the cotton prices cool off,” he added.
“Following the curb on yarn exports, the garment exporters were going slow in procuring cotton yarn as they expected prices to drop from January. But the sudden rise in cotton prices have led to panic buying in the market,” said a leading cotton yarn supplier in Tirupur market.
The price of Shankar-6, the widely used Indian cotton, was quoted at Rs 47,000 per candy in the first week of November. After the suspension of export registration, the prices started cooling off and it reached Rs 40,000 per candy on December 15. But the recent message that the export registration will start again for the un-shipped quantity of 25 lakh bales has pulled up prices to the Rs 43,000-per candy levels. Industry experts feel that it may even go up to Rs 50,000 per candy once the export registration starts
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