With cotton prices declining in India and Pakistan and polyester prices rising at the same time, the cotton vs polyester price difference has been reduced in both countries in February. Cotton use should therefore be favored to the detriment of polyester.
Cotton use should now be supported by the weakening cotton prices in India and Pakistan whereas polyester prices have risen in the last month, by contrast.
Lower difference
The cotton vs polyester price gap has narrowed in India and Pakistan, which should favor cotton yarn production to the detriment of blends and 100% polyester.
Polyester fiber prices have risen 6.6% in February in India with the benchmark indicator 1.4D PSF reaching 104 rupees whereas the same indicator has gained 2.12% in Pakistan at 193 rupees.
From the same month a year earlier, PSF prices have risen 9% in India, surging 25% in Pakistan.
Polyester prices have declined 3% in China by contrast.
In US$ terms however, PSF has fallen 9% in China, dropping 1% in India and Pakistan. As a result, PSF prices are 11% higher in India than in China and 6% higher in Pakistan, still in US$ terms.
Lower cotton prices
Cotton prices have declined in India and Pakistan in February, in local currency terms, respectively losing 2.4% and 1.2%.
The cotton indicator has actually remained at a high level in the last months in Pakistan whereas India’s Shankar 6 has continuously declined.
Cotton prices are however now supported by official buying in India in order to keep rates in line with minimum support prices.
In China, cotton prices have bottomed out in the past weeks, in absence of new official sales from state reserves.
As a result, the cotton vs polyester price difference remains relatively unchanged in China, favoring a large PSF use in the country by contrast with a predominant cotton use in India and Pakistan.
Source: Emergingtextiles
