17 May 2010
Cotton yarn export prices continue rising in May in India, reflecting the strong demand from foreign buyers. The removal of export incentives did not really curb cotton yarn exports. Polyester yarn and polyester-viscose prices are falling on India's export market, by contrast.
Cotton yarn prices less strongly rose in May on India's export markets.
Prices only gained 5-10 cents a kg, compared with a jump of 40-80 cents a kg in April.
Cotton yarn prices continue however remaining at an all time high, with no sign of relief in the coming days.
Similarly, prices of polyester-cotton yarns have increased by 15 cents a kg in May, after rising 15-40 cents a kg in April.
Viscose yarns were up 10 cents, but prices of some counts however fell 5 cents.
Acrylic spun yarns were up 10 cents on India's export market.
All these prices continued to rise, although domestic yarn prices were down by 10-25 cents a kg in May.
A series of products however followed the downward trend of the domestic market.
Polyester-viscose yarn prices have come down by 5 cents, even as these had gone up 20-65 cents in April.
Prices of polyester spun yarn prices witnessed the sharpest fall of 15-25 cents, after moving up 50-65 cents in April.
Whatever the decline in certain products, spun yarn export prices generally are 15-30% higher than six months ago.
Following the sudden surge of cotton yarn prices, the Indian government had last month withdrawn export incentives on cotton yarn exports.
This was expected to curb yarn exports.
With the strong international demand, however, foreign buyers accepted a new rise in yarn prices.
A surge in cotton prices and a severe power shortage in the south had resulted in the surge in spun yarn prices.
The government has also banned cotton exports in order to limit the rise in textile production costs.
Cotton prices have therefore slided, before however rebounding in the last ten days.
This could hurt the majority of small-sized companies which do not cover their cotton positions for a whole year, but carry stocks of only 15 to 30 days.
Cotton supply in the market remains tight, further putting pressure on prices.
The yarn industry expects the ban on cotton exports to continue until the start of next season in October 2010.