MUMBAI (Commoditiescontrol) – Although yarn markets are subdued and production has fallen to 40 per cent of normal in Bhiwandi textile hub, mills have raised their offers for cotton yarn to pass on higher cost of cotton. Prices are raised Rs1-2 a kg with 20s carded at Rs155 a kg and 30s to Rs199 a kg. 40s were pegged at Rs209 a kg. However no deal was heard reported at the revised numbers. Even polyester fibre prices were raised by producers by Rs2 a kg, but since there is no demand for polyester yarn, price remained unchanged.
Demonetisation has rattled the textile business seriously. Players are facing twin problems; very week demand and fear of administrative backlash. “All major local markets trading in unorganized manner are in bad shape. Even big traders are under Income Tax scanner and may face huge tax demand. So it is time to do low profile business and very carefully”, a trader from Bhiwandi told CommoditiesControl on anonymity.
Because of note bandi fabric production is also down 50 per cent in the hub, said a powerloom owner from Bhiwandi. Sources said that weavers are expecting normalcy to come by only January end and then prepare to meet the demand, which picks up in March. Currently local sale is badly affected while exports are moving of fabric weaved with finer yarn count of 60s and 80s, but not so well. Denim market is also at its lows.
It seems yarn price are increasing without any basic reason, but the only benefit of the rise is weavers able to clear existing stock at low price. Yarn and fabric prices are likely to surge following the current hike in cotton and polyester prices.
The textile hub of south Coimbatore witnessed rise in fabric prices by Rs3 per metre as traders took advantage of low stock amid festive demand. Fabric pipeline is almost empty since production has declined sharply post monetization, sources said.
According to Southern India Mills Association, as of mid-December of the 2,007 spinning and composite mills 535 were shut across India post demonetisation, including 218 mills in Coimbatore.
In Gujarat, of the 36 mills in the state, 16 mills have shut by now.
(By Commoditiescontrol Bureau; +91-22-40015522)
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