Low demand drives cotton prices down by Rs 20 per kilo in Tamil Nadu

Prices of cotton yarn fell by Rs 20 per kilogram in all categories when compared to October. Experts listed a number of reasons for the same, including falling prices of cotton candy and low demand for yarn in the garment industry. They added that another reason is reluctance by garment units in Tiruppur to take new orders.

According to industry data, price of cotton yarn in 20s count, 30s count, 40s count dropped below Rs 350 per kilogram. For example, the price of 40s count cotton yarn has decreased from Rs 411 in February to Rs 350 in November.

Speaking to TNIE, Tiruppur Exporters and Manufacturer Association president MP Muthurathinam said, “Fresh arrival of cotton in the domestic market and stabilisation of price in international market is the main reason for the fall in price. Besides, many garment units are reluctant to take orders, as they are confused whether there would be more fall in cotton yarn in the following months. But, few garment units have decided to take a call. I personally feel that this yarn price is based on their personal risk, they can go ahead and take orders.”

Proprietor of Bhagwan Hosiery K Nagarajan told TNIE, “The falling price of cotton yarn has confused the garment units in Tiruppur. The price isn’t enough to take orders and that’s why many of them are reluctant to take the risk by procuring yarn from cotton mills. Not just garment units, distributors from other North Indian states are also waiting to see if the price falls further. If the price is stabilised even for three months, the garment units would move for procurement.”

Tamil Nadu Spinning Mills association special adviser Dr Venkatachalam said, “Price of cotton candy has dropped to Rs 65,000, one of the lowest in recent times, due to the arrival of fresh cotton in the market. Also, there has been no movement of cotton yarn in the domestic market for the past two month and procurement from the garment units has also dropped very low due to which there is a huge accumulation of cotton yarn  in the mills. So, the  prices are dropping at the moment.”

An official from the Department of Textile (TN Government) said, “This is a trend in cotton and cotton yarn for several years. When there is low demand from the garment industry, the price of yarn is reduced by cotton mills, and if the demand is more, prices are increased.”

“Currently, the fresh cotton arrivals have also begun in the market, and as arrivals are further expected to receive full swing in November month. Besides, there is huge accumulation in every cotton mill for the past several months. So, many mills are pushing out the yarn with discounts and other methods,” the official added.

Source: The New Indian Express