Yarn buyers waiting for further lower prices

Yarn Market Faisalabad continually down due to downfall of cotton rate on world-wide market. The cotton yarn prices were heavily falling; carded yarn prices were less declining while yarn buyers preferring waiting for lower prices. Yarn prices on the domestic market registered a decline of 60 to 225 rupees.
On Saturday Yarn counts 7/S, 10/S, 16/S, 20/S, 22/S, 24/S and 30/S sell at low price compared with previous days, 40/S and 52/S sale decreased in volume and Yarn counts, 72/S and 80/S sales are totally quiet. Central Chairman All Pakistan Yarn Merchant Association Muhammad Tahir said that cotton prices dramatically fell in China, India and Pakistan. Spinners did not similarly react to the drop in prices. Profit margins have been more preserved in Pakistan than in China and India, as reflected by the series of historical data, back four years ago.
He Said, Slump in cotton yarn market and steep decline in cotton prices are resulting in cotton purchase defaults here. Meanwhile, cotton yarn sale is slow and stocks are piling up with mills. Ex Chairman (Central) All Pakistan Yarn Merchant Association Muhammad Ashraf Gandhi said the main reason of downfall is world-wide decrease in cotton rates. The rate slashing continues, dropping by Rs 200 to Rs 5,500.
He said, several value-adding segments of the industry were seeking measures to bring down yarn prices. However, yarn prices increased only because of spiralling cotton prices. Yarn sales had declined and stocks were increasing with the mills. According to an industry source, 10 to 20 per cent textile mills in the country have cut 25 percent to 40 percent production. This is a lean season for weaving units and the international demand is also low. Hence, the textile mills have reduced production. The Government should provide duty drawback for yarn exports. This will help revive exports, the source said.
July and August are difficult months as there is slowdown in the market. Some industrialists have decided to continue with reduced production till the market condition improves. There is a marginal decline in stocks with the mills and prices have not firmed up. Bangladesh imports are expected to revive soon and the festival season in the domestic market starts in August. Hence, production should start picking up in a month, he says.