Mumbai, June 3: A significant decline in cotton yarn prices has been recorded for the first time this year, providing much-needed relief to the knitwear and textile industry in Tiruppur, Tamil Nadu. For several months, rising raw material costs had put immense pressure on manufacturers and exporters.
This price drop follows the central government’s decision to temporarily exempt customs duties on cotton imports from June to October. The aim is to increase supply in the domestic market and stabilize prices.
Industry sources report that cotton yarn prices have fallen by nearly ₹10 per kilogram, reflecting a substantial decrease in cotton prices. This development is seen as a positive sign for the textile and apparel sector, which has been grappling with rising input costs since the beginning of the year. There has also been a notable improvement in domestic cotton prices.
Cotton prices have dropped to approximately ₹63,000 per candy (356 kilograms), down from nearly ₹69,000 per candy before the announcement of the import duty exemption. This decline in cotton prices has had an immediate impact on yarn rates, benefiting spinning mills, garment manufacturers, and exporters.
The Tiruppur knitwear cluster, one of India’s largest textile and apparel export hubs, has been significantly affected by the continuous rise in cotton and yarn prices. Between January and May, yarn prices surged to around ₹65 to ₹70 per kilogram, leading to substantial increases in production costs for manufacturers.
Cotton, which was selling for about ₹54,000 per candy at the beginning of the year, experienced a rapid increase in recent months due to supply shortages and rising global prices. The escalating raw material costs had raised concerns among exporters and domestic garment manufacturers. Many feared that rising prices would impact their competitiveness in international markets and reduce profit margins.
With the recent decline in cotton and yarn prices, manufacturers hope that the pressure on production costs will ease. This reduction is likely to benefit the entire textile value chain, including spinning and knitting units, garment exporters, and retailers.
Industry experts believe that if cotton imports increase and market supply improves further, this trend of price reduction may continue in the coming weeks. There is optimism that during the duty exemption period, cotton prices may soften even more, leading to further decreases in yarn prices.
However, the industry views this development as a temporary relief rather than a complete solution. Nonetheless, the drop in yarn prices is expected to provide crucial support to textile manufacturers and exporters as they navigate challenging market conditions and uncertain global demand.
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