The cotton vs polyester price difference has slightly increased in the past month in China and India, supporting the use of a cheaper polyester fiber at spinning mills when apparel exporters are trying to limit the impact of higher production costs in Asia.
Cotton prices have rebounded in March in India, if considering averaged prices over the month.
By contrast, cotton prices have stayed unchanged in Pakistan, whereas very slightly rising in China.
A lower cotton production this season in India has triggered anticipations of higher prices later this year.
As a result, the benchmark Shankar 6 has gained 3.2% at 43,167 rupees per candy.
The same indicator has further climbed, now reaching 45,000 rupees.
In China, cotton prices have only risen 0.5% in March, being supported by the lack of official sales from state reserves.
The market continues anticipating higher cotton prices after the end of trade negotiations with the United States.
In Pakistan, the market indicator has been stuck for weeks at 8,600 rupees per maund and is still at the same level in the current week.
Cotton prices should stay very firm in the coming period, in line with a disappointing level of the crop in India and Pakistan whereas demand is strong from importing countries like Vietnam or Bangladesh.
Polyester prices have not moved in March and should also stay very firm due to the rise of material costs, especially PTA prices.
Demand for polyester remains supported by the need to lower material costs in China and to further shift from cotton to polyester use in blends.
With cotton remaining at a relatively high level, the cotton vs polyester price difference between the two fibers has rebounded in India from the very low level reached in the previous period.
The same fiber spread has also risen in China, although at a much lower pace, remaining unchanged in Pakistan, at relatively low levels by historical standard.
Source: Emergingtextiles
