14 September 2011
Spun yarn prices began recovering in September in India, after falling since last spring. The rebound of cotton fiber prices and a stronger demand from downward processors is supporting the new trend in market prices, our India Correspondent reports.
Spun yarn prices began bottoming out in September in India, and the trend is expected to get stronger in the weeks to come.
Better demand in the market and higher raw material prices have resulted in the price rebound.
Cotton prices are now strongly rising in India, after restrictions were lifted by the government on shipments to foreign countries.
With foreign demand pushing up rates, certain varieties have risen 17-19% in the last one month. J34 and MECH gained about 19% in a single month and benchmark Shankar 6 was up 17.65% in the meantime.
The jump in cotton prices has pushed up cotton yarn prices by Rs 5-8 a kg in September, after falling consistently from April this year.
August prices had reached a six-month low before offers rebounded in September.
In addition to higher raw material costs, the rise of cotton yarn prices was supported by a lower level in inventories after production was repeatedly cut in the previous months.
Demand is also recovering from weavers, after fabric sales improved over the past weeks.
A similar upward trend is being witnessed with other spun yarns.
Prices of polyester-cotton yarns had been falling for two consecutive months, following an unprecedented rise in prices since the beginning of the year.
Prices of polyester-viscose have risen Rs 2-6 a kg in September, after remaining stable in August. Prices in the last six months have come down 23%.
Prices of polyester spun yarns have also gone up by Rs 2-3 a kg this month. Demand for polyester and blended yarns remains good.
Prices of viscose spun yarns are around Rs 2-3 a kg higher than in August. Demand for viscose spun yarns is expected to get stronger soon.
Higher raw material prices are expected to push up yarn prices in the coming weeks. Better demand in the market and normal inventory levels have helped absorb the price hikes.