Cotton yarn prices have stopped rising in India where cotton fiber prices have sharply fallen in the last seven days, in line with a dramatic decline of the international cotton market. The deterioration of US-China trade relations which has triggered the fall of cotton prices is therefore immediately benefiting Indian spinners.
Cotton prices have begun sharply falling on Indian domestic market, in line with the dramatic decline experienced on New York’s futures market.
In a single week, the benchmark Shankar 6 has lost 1,400 rupees per candy, being down more than 3%.
Cotton prices are still far above their level at the end of February, however.
Prices had previously rebounded over a tight supply situation in India, due to a fall of cotton production this season.
Spinners have begun importing large quantities, especially if located in the Southern part of the country and they should now benefit from the collapse of prices on the international market.
Gross margins could be expected recovering at yarn plants, especially after price offers have not been lowered so far.
Cotton yarn prices are no more rising on the other hand, as reflected by our survey below covering Tamil Nadu, Maharashtra and Punjab.
The sudden deterioration of US-China relations could also boost demand from US apparel buyers, knit apparel exporters in Tirupur have predicted.
Although US demand is clearly leaving China, Cambodia and Vietnam should be the main winners of the new supply chain, as benefiting from a high level of Chinese investment in their clothing industries.
Source: Emergingtextiles
