14 June 2011
Yarn export prices continue strongly falling in June in India, after already sliding in the last month. Demand remains extremely weak at these rates, as yarn buyers are expecting lower cotton prices in the next season, and prefer further waiting, our India Correspondent reports.
Lack of demand in the market continues to push down India's export prices for spun yarns. Demand is expected to trickle in by July.
Export prices of cotton yarns from India continued a southward trend, witnessing a fall of 8-11% in June, compared to prices in May.
Cotton combed yarn of 30s count is in the region of US$4.05 a kg FOB India.
Cotton yarn export prices in the last six months have fallen 20-30%.
Export price of polyester cotton 30s combed is US$3.40 a kg, a fall of over 16% in a month. Fast moving counts have registered a decline of 60-70 cents a kg since May.
Similarly, polyester viscose yarn prices were 17-20% lower than prices in May.
PV 30s is quoting in the region of US$ 3.35 a kg.
These prices are around 15% lower than six months ago.
A similar trend is witnessed in polyester spun yarns, with prices falling 14-16%. PSY 30s count is around US$ 2.70 a kg. Export price of viscose spun yarns were 40-65 cents lower than in May.
While these are the quoted prices, some spinners are ready to offer heavy discounts as inventory pressure builds up.
Even as prices in May and June have continued a downward spiral, demand evades the market. The current price situation is hurting exporters and buyers.
Exporters have produced the yarns using the high priced cotton, and cotton prices since have come down.
Buyers are weary of placing orders as they also purchased yarns at higher prices, before they plunged.
Buyers therefore prefer to wait for prices to fall further.
As India is expected to harvest a bumper cotton crop in next season (October-September), prices will inevitably fall, and this has limited demand for yarns, so far.
Traders have not come into the market for quite some time.
Indian exporters expect the situation to improve only when traders step in.
This could happen after a fortnight or so, when stocks across the chain will dwindle.
As the situation remains gloomy, some mills in South India have cut production.
In the northern part of the country, most mills still operate at earlier operating rates. This will continue, as long as mills are able to meet their variable costs.