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Yarn prices to increase with a rise in demand: Ind-Ra

Aug 05, 2021
Yarn prices to increase with a rise in demand: Ind-Ra

New Delhi

India Ratings & Research (Ind-Ra) has come up with its May-June 2021 edition of its news on the textile sector of India. As per the report, the following points have been highlighted-

?        Rise in cotton prices- There has been a hike in the prices of cotton during July this year. This is due to a rise in the demand for cotton in both domestic and international markets due to the easing of lockdown restrictions.

?        Rise in price of cotton yarn- It is expected that the prices of cotton yarn will increase further due to a rise in the demand from domestic and export spinners. The demand from spinning mills has increased after the second wave of Covid-19 and because of the upcoming festivals in India.

?        Improvement in MMF prices- As per Ankita Shere, Senior Research Associate, India Ratings and Research Pvt Ltd, the prices of raw materials like mono-ethylene glycol and pure Terephthalic remained constant in June. On the other hand, the prices of downstream products like fibre and yarn increased because of a rise in demand due to the upcoming festivities in the country. Also, as the prices of cotton have increased, the spreads between cotton-polyester staple fibres have increased.

?        Apparel production remained flat- Domestic apparel production remained constant due to the disruption caused by the pandemic. The domestic demand has also been affected as the retail space has closed. The total export of apparel has declined by 20%.

?        Decline in Stock-to-use ratio- It is forecasted by Ind-Ra that the inventory levels will remain moderate while the production will be stable and the demand will be strong. The domestic stock-to-use ratio will decline to 73% from 84%.

?        Home textile players will show healthy performance- in selective products the demand momentum will sustain. The product pricing on terry towels has strengthened in June compared to sheets, blankets, and cotton-printed made-ups.

Source – India Ratings and Research

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