During the week from January 10th to 14th, the imported yarn spot market remained active, with some terminals actively stocking up, and some traders actively stocking up to prepare to open positions at high prices after the year. The price of 10-count siro spun yarn and 20-count carded ring-spun knitted knitted fabric both increased by about 1,000 yuan/ton, and the transaction volume was considerable. Among them, the second-line price of 10-count siro spun yarn was around 23,800-24,000 yuan/ton (tax included); 20 The price of carded ring-spun knitting yarn is around 27,500 yuan/ton (tax included), and some containers arriving at the terminal are even warehoused and reluctant to sell. Affected by cotton futures, market prices even rose again by the end of the week.
The forward price of the external market is still high this week, and the downstream gradually accepts the high price. Some cheap brands with the same count are easy to transact. There are even high-price transactions for Basha Siro spinning. The price of 10 yarns is 610 US dollars/400 pounds, which is about 24,800 yuan/ton (tax included), which is 1,000 yuan/ton higher than the spot price; 32-count carded and bleached knitting yarn is also available The transaction was completed, the price is US$4.05/kg, the delivery date is February, the arrival time is ideal at the beginning of the new year. The Spring Festival is approaching, and factories in Southeast Asia are also approaching their holidays. Some factories have stopped quoting and are preparing to quote after the Spring Festival holiday.
Taken together, traders in the spot market are currently in a high mood to push prices higher. Prices were high before the year, and there may be a small number of transactions. After the start of the new year, prices are expected to bloom everywhere. The price of Indian yarn in the external market is still high and cannot be traded. Judging from the current demand situation, downstream domestic sales are doing well, prices can slowly pass on, and there is potential for export sales. Customers need to import yarn when placing orders, and the market is slightly optimistic after the holiday.
Further reading:
Indian Industry Association: High cotton prices impact textile industry factory raw material inventories plummet
China Cotton Network News: The Federation of Indian Textile Industry stated that soaring cotton prices have affected the Indian textile industry and Indian cotton has lost its competitiveness.
Currently, domestic cotton prices in India are higher than in the global market. In December last year, India’s benchmark S-6 cotton variety was traded at an average price of Rs 70,000/kander (Rs 197/kg). In comparison, ICE cotton futures were at 113.63 cents per pound (Rs 187 per kg). After the announcement of the union budget for 2021/22, Indian cotton prices were higher than international prices for the first time, resulting in uncompetitive exports and exporters facing difficulties in fulfilling export commitments and accepting further orders. This is because there is about 11% import duty on cotton after the budget.
As seed cotton is at an all-time high, Indian farmers have not sold new cotton, leading to a domestic cotton supply shortage and soaring cotton prices in India. While price increases have benefited cotton farmers, the industry has been unable to pass on the price increases to end customers as domestic cotton prices have exceeded international prices.
After keeping the yarn price unchanged during the peak period of new cotton harvest, the yarn mills finally could not withstand the pressure and raised the yarn price. Generally speaking, cotton mills usually have 3-4 months of cotton inventory ready at the end of December every year, but the current inventory is less than one month. Abnormal rainfall during this year’s harvest has seriously affected cotton quality, leading to a serious shortage of high-quality cotton in India. In previous years, the daily market volume of new cotton in India ranged from 230,000 to 250,000 bales in December and January, but this year it was only 162,000-180,000 bales. As of December 31, 2021, only approximately 12.1 million bales of new cotton had entered the market, compared with the usual 17-20 million bales in previous years. In the first three months of this year (October-December), India’s domestic cotton consumption was approximately 8.5 million bales, with another 1 million bales exported and 1.5 million bales in circulation channels, resulting in a decline in cotton inventory levels.
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