Cotton yarn prices hiked 2-4 percent in Tiruppur and Mumbai during the last 3-4 days although not in demand, and costlier cotton caused a steep price rise in the yarn market. Various power looms in Bhiwandi and other areas were compelled to chop their production as fabric demand remained low. However, cotton yarn prices are likely to witness an upward trend as cotton prices firm up.

Demand from downstream industries is likely to pick up in the second half of the current month. In the Mumbai market, 60 count carded cotton yarn of warp and weft varieties were traded higher at ₹50-100 to ₹1,920-2,000 and ₹1,700-1,750 per 5 kg, respectively. 80 count carded cotton yarn of weft variety was sold at ₹50-70 to ₹1,900-1,950 per 5 kg. 46 count carded cotton yarn of weft variety was sold at ₹1,740-1,770 per 5 kg which gained ₹130-140 per 5 kg in the market.

According to a Mumbai-based broker, demand remained weak, but yarn prices rose due to greater cotton prices. Many power looms were forced to cut down their production due to weaker demand for fabric. Power loom owners in Bhiwandi were running on one shift to manage the units. They are building a stock of fabrics as there is no demand from garment manufacturers. The demand is expected to increase after Makar Sankranti/Pongal on 14 January. Garment units stop winter wear production in December and begin summer clothes manufacturing after mid-January.

Similarly, in the Tiruppur market, cotton yarn prices jumped up by ₹25 per kg due to high cotton prices. Cotton yarn of 30 counts combed was traded in Tiruppur at ₹350-355, 34 counts combed at ₹357-362 and 40 counts combed at ₹385-390 per kg. Buyers were buying yarn just for immediate need, They were trying to keep their looms running to retain their workers. Spinners’ margin shrank in the last couple of weeks as they could not increase yarn prices, but they have to bear the additional cost of production due to higher cotton prices. The prices are likely to rise further when demand picks up.

Domestic markets also witnessed an upward price trend in the cotton trade due to weaker supplies in mandis. The prices increased by ₹500-600 per candy (356 kg each) in various markets. In north India, cotton prices were ruling at around ₹68,000 per candy, while it was priced between ₹70,000 and ₹72,000 per candy in southern and western states.

Meanwhile, ZCE cotton yarn January 2022 futures traded higher by CNY 225 at CNY 27,185 per ton and May 2022 traded higher by CNY 180 at CNY 27,910 per MT today. ICE cotton futures edge higher on Monday amid robust demand outlook, but further gains were limited by a strong dollar. Cotton contract for March 22 closed at 113.23 cents, up 63 points; May 22 closed at 110.91 cents, up 43 points; and December 22 closed at 92.95 cents, up 30 points.