Cotton yarn prices, which dropped at the beginning of this year, are expected to decline further from May 1 due to slack demand. As Atul Ganatra, President, Cotton Association of India, announcement of new lockdowns has forced workers to migrate to their villages, leading to a drop in production. Warp yarn prices have dropped Rs 30 a kg and are expected to drop further from May 1. Demand for weft yarn has also declined due to closure of mills in Maharashtra, adds K Selvaraju, Secretary-General, Southern India Mills Association (SIMA).

Merchandise exporters are dispatching stocks on hand rather than buying from mills, said Anand Poppat, a Rajkot-based trader in raw cotton, yarn and spinning waste. The closure of ginning factories across the country has forced cotton growers to wait to sell their produce, adds Ganatra.

Ginning factories in Gujarat have ended operations and are now getting higher prices for cottonseed derived by processing raw cotton into lint, adds Poppat. Spinning mills were under tremendous pressure to bring down yarn prices despite their overheads rising due to a slew of factors. These mills have urged the Centre to allow their units to run without any curbs now.