With cotton prices remaining stable and ruling at lower levels compared to the international market, textile mills have seen a sharp improvement in their fortunes. Export of cotton yarn, fabric, made-ups and handloom products surged 18% year-on-year (y-o-y) or by US$ 884 million in April.
"The yarn market has gained momentum in recent times and the unsold yarn stock level is one of the lowest in recent years," said P Nataraj, chairman, Southern India Mills' Association (SIMA). "The demand for coarse and medium counts, especially open-end yarn, both in the domestic market and export market has increased considerably and several mills have got advance booking for few months," he stated. "Taking advantage of increased fabric demand, yarn prices have increased during the middle of May when compared to the previous month," the SIMA chairman said.
Prices of 30s and 40s count hosiery yarn have increased by Rs 5 per kg on an average in the middle of May. Similarly, yarn used for weaving has seen a price increase of Rs 3-7 per kg. "Some mills are booked up to June for fast moving yarn counts," said K Selvaraju, secretary general, SIMA.
Cotton prices are ruling lower than the international market giving mills the much needed momentum, especially in the export market. Prices of Shankar-6, the popular cotton variety used by mills, are ruling at around Rs 43,000 per candy (a candy is about 355 kgs). The landed cost for imported cotton of a similar variety works out to Rs 48,000-50,000 per candy.