Foreign news on April 18th: India decided to cancel approximately 11% of cotton import tariffs last week. This decision failed to cool down cotton prices in the domestic market. On the contrary, prices continued to rise. However, yarn did not keep pace with the cotton rally, with yarn prices remaining stable in the northern Indian markets of Ludhiana and Delhi.
As cotton prices continue to rise in international and domestic markets, spinning mills are reluctant to reduce yarn prices. Traders said trade across the value chain remains at a standstill as spinners are not interested in lowering yarn prices, while fabric and apparel manufacturers are struggling to make ends meet due to weak demand and uncertain market conditions.
A trader from Ludhiana said that spinning mills have not lowered yarn prices because cotton prices have not fallen back after the removal of import tariffs. Yarn demand remains very weak and fabric manufacturers face weak demand from the apparel industry. Data shows that yarn prices remain stable in Ludhiana.
An industry insider in the Delhi market said that the market has been in a special situation, with rising yarn costs and poor end-user demand. Cotton futures prices on the Intercontinental Exchange (ICE) surged last week on hopes of increased buying from India after tariffs are lifted. But rising prices in the international market have made cotton imports unfeasible. Yarn prices in Delhi market are stable but demand is weak.
Meanwhile, homeware centers in Panipat are facing shortage of cotton, polyester, sweater waste for making recycled yarn. The price of polyester-cotton recycled yarn rose slightly as the price of polyester scrap increased after the price of newly spun polyester staple fiber rose sharply.
In northern India, cotton prices rose by 400-500 rupees per unit (1 unit = 355.62 kg) on Monday as arrivals fell due to increased demand from textile mills. In Punjab, cotton price per unit is 93,600-94,800 rupees. In Haryana, cotton price per unit is Rs 91,800-94,200. In upper Rajasthan, cotton prices range from Rs 95,000 to Rs 95,400 per unit. In lower Rajasthan, cotton price per unit is Rs 89,400-91,400.
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