Prices of cotton yarn, which were on an upward trend since December, are expected to remain stable in the coming weeks.
Chairman of Southern India Mills’ Association Ashwin Chandran told The Hindu on Thursday that following a recent virtual meeting of the textile mill associations from across the country, the associations have urged their members to keep the prices stable this month due to concerns among industries in the value addition segment.
Prices of cotton was about ₹ 34,500 a candy in August last year and ₹46,000 now. Prices of hosiery yarn was ₹215 a kg in August last year and ₹291 now. The hosiery yarn requirement of Tiruppur garment units are mostly (75 % to 80 %) met by the textile mills in Tamil Nadu. The mills are operating at 85 % to 90 % capacity as against the normal of 93 % to 95 %. This is because of labour shortage and to some extent working capital crunch.
Mr. Ashwin Chandran said that with gradual decline in export orders and domestic demand, textile mills in the country were facing several challenges since 2015. Many mills had closed down too. The problems aggravated during lockdown last year. However, demand starting reviving in August for select products and picked up for all products. With an unexpected surge in requirement for yarn, the mills were unable to increase production suddenly. Hence, there were problems in supply to the customers. Prices also went up because of higher cotton prices.
“There was a pent up demand and inventory filling happened at every level. There were logistics-related challenges too. Hence, there was a demand-supply mismatch for a couple of months,” explained Mr. Ashwin Chandran. “Things should normalise now,” he said.
However, Indian yarn prices continue to be lower than international prices. Hence, the end product manufacturers should talk to their customers for higher price realisations, he said.
Source: The Hindu, India Friday, 02 April 2021