Shift in price dynamics; Vietnam now yarn supplier to India

28 Oct 22

The scarcity of cotton along with a comparatively higher price in

India has resulted in a shift in its trade dynamics with Vietnam.
The far-eastern country, which was earlier one of the major
markets for Indian cotton yarn, has now become a supplier to
India. While India’s yarn exports show downward trend this year,
its imports from Vietnam have jumped.

According to market insight tool TexPro, India’s yarn export to

Vietnam dropped to $6.485 million in July 2022 from $18.084
million in February this year. Monthly export was noted at $17.130
million in March, $12.715 million in April, $10.435 million in May
and $9.828 million in June 2022. According to trade sources, the
yarn export reduced from India due to price disparity. Cotton
prices in India are still ruling higher than international market.

It is to be noted that India’s yarn exports to Vietnam had

registered growth during preceding years. The export increased in
2020 to $169.087 million from $131.540 million in 2019. It further
rose to $220.579 million in 2021.

On the other hand, India’s import of yarn from Vietnam increased

drastically to $24.875 million in July from $4.521 million in March
2022. India had imported yarn worth $6.612 million in April,
$7.733 million in May and $7.714 million in June 2022. Annually,
the import recovered to $60.155 million from $37.530 million in
2020, which fell from $130.416 million in 2019 due to COVID-19
disruption. India’s yarn import was valued at $61.270 million in
the first seven months of the current year, which is already more
than the total inbound shipment of 2021.

India imported yarn worth $120.707 million in 2017 and $129.885

million in 2018 from Vietnam, as per TexPro.
Business situation of textile industry worst in Asia in Sept 2022 :

The business situation of the global textile industry in September

2022 was relatively the worst in Asia despite improvements. The
indicators for order intake, order backlog, and capacity utilisation
rate also fell, globally. While all segments found themselves in
negative situations, spinners’ situation have plunged to an
unprecedented level.

A positive sign for the future is that global expectations have

stopped falling in September 2022, albeit staying in negative
territory and therefore indicating difficult times ahead, according
to the 16th International Textile Manufacturers Federation (ITMF)
Global Textile Industry Survey (GTIS, formerly known as ITMF
Corona-Survey). Expectations have improved in South Asia, North
and Central America, and Africa. Spinners have also better
prospects for March 2023, globally, indicating potential relief.

Order intake fell further, in line with the weaker business situation.
Companies in North and Central and especially in South America
saw order intake increase while the Asian regions continued
struggling with an unsatisfactory order situation. Order backlog
fell on average across all regions. South America is an exception;
both order intake and backlog increased.

Only dyers/finishers and knitters/weavers experienced a small

increase in order backlog. In all other segments order backlog fell.
While capacity utilisation rate dropped globally in September 2022,
it increased in South America’s, ITMF said. Fibre producers
registered a steady decrease in capacity utilisation rate and home
textile producers seem to have reversed their downward trend.

Weakening demand, high raw material prices, high energy prices,

and inflation are the four major concerns of the global textile
industry for the next six months. The concern about
transportation costs have fallen significantly. Concerns about
geopolitics on the other hand have increased significantly in the
past two months.
Cotton yarn prices down in South India; buying remains muted

Oct 22

Cotton yarn prices slipped by ₹3-8 per kg in south India as sellers

were struggling to get buyers. According to traders, buyers were
least interested due to uncertainty from downstream industry and
festival mood, and sellers were forced to offer lower prices.
However, traders expect better demand after Diwali when prices
may fall due to new crop arrival.

Mumbai market witnessed downward trend and cotton yarn

prices slipped by ₹3-7 per kg. Mills and stockists are struggling to
get buying enquiry. “Buyers remained muted before Diwali. Slower
demand from downstream industry and festival mood
discouraged buyers. Let us hope to see better buying after Diwali,”
a trader from Mumbai market told . In Mumbai, 60 count carded
cotton yarn of warp and weft varieties were traded at ₹1,650-
1,690 and ₹1,590-1,620 per 5 kg (GST extra) respectively. 60
count combed warp was priced at ₹365-375 per kg. 80 carded
(weft) cotton yarn was sold at ₹1,550-1,600 per 4.5 kg. 44/46
count carded cotton yarn (warp) was priced at ₹317-322 per kg.
40/41 count carded cotton yarn (warp) was sold at ₹300-305 per
kg and 40/41 count combed yarn (warp) was priced at ₹315-320
per kg, according to market insight tool TexPro.
In the Tiruppur market, cotton yarn prices decreased by ₹3-8 per
kg. Poor demand from weaving industry and cheaper cotton
dragged down yarn prices. There was optimism of improvement
after Diwali. A trader from Tiruppur told “Demand remained weak
from local and export markets. There is no possibility of price rise.
If demand improves at lower prices, it will be a good sign.” Today,
30 count combed cotton yarn was traded at ₹312-317 per kg (GST
extra), 34 count combed at ₹320-325 per kg and 40 count combed
at ₹328-333 per kg in the Tiruppur market. Cotton yarn of 30
count carded was sold at ₹285-290 per kg, 34 count carded at
₹290-295 per kg and 40 count carded at ₹302-318 per kg, as per
TexPro.

In Gujarat, cotton prices dropped by ₹1,000 per candy of 356 kg in

the last couple of days due to sluggish trend in the global market.
According to market sources, demand from spinning mills
remained average. Bearish trend of ICE cotton dampened
sentiments in cotton market. Cotton prices decreased from
₹69,000 to ₹68,000 per candy in Gujarat. Daily cotton arrival
increased to 20,000-22,000 bales of 170 kg each.