India´s domestic cotton prices are holding at record levels, while yarn prices have not yet caught up. Spinners are having a difficult time raising prices to the same degree. The hardest hit sector appears to be those spinners concentrating in the medium-count yarns that consume a large volume of domestic middling 1-1/8" and better grades such as Shankar-6. Spinners producing yarns in this count range that have not already covered their consumption needs at much lower prices are suspending operations in 15 to 20 percent of their spindles or they are switching to producing ELS yarns for export. This is a short-term solution, as global ELS stocks are tightening quickly along with prices.

The open-end yarn spinners seem to be in better shape and are aggressively producing low-count 12 to 20-count yarns using a wide range of low-quality local cotton and cotton waste. Much of these yarns are being exported mainly to China. India´s total cotton consumption is expected to decline during the May through December period until local new crop cotton becomes available.

Source: globecotnews