The price per kg of Indian woven cotton yarn rose from $2.65 in August last year to $3.65 in January this year an increase of 37.7 per cent. The price per kg of combed cotton yarn of 30s count is now $3.55 per kg with an increase of 8.33 per cent over December.
The price of Indian cotton fiber has not increased significantly but the price of cotton yarn is higher than domestic and export prices. The problem is exacerbated by uncertain demand in supply chains. International buyers resumed their orders in the second half of 2020. Already inventories have dried-up as supplies failed to match demand and spinning mills resumed operations late across India.
The demand for Indian yarn is growing with a large number of orders coming in from Bangladesh and Vietnam. Bangladesh is already planning to buy from the stock market as the price of cotton has skyrocketed.
Manpower was limited at the time of the lockdown-induced factory closure resulting in limited production. Later when demand increased, traders and agents started selling more to those who were willing to pay higher prices and, therefore, prices have risen significantly in the last six months.
According to experts, the price may rise further by March 21. This could lead to further difficulties in the Indian textile and garment supply chain. Already weaving price increased from 12-15 paisa/pick to 20-24 paisa/pick in India.