South India cotton yarn markets face margin squeeze as natural fibers costs rise

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Cotton yarn prices across major South India trading hubs including Tiruppur and Mumbai have registered an upward movement of Rs 5-8 per kg across multiple counts. This upward adjustment is directly due to rising domestic raw cotton prices and firming international commodity benchmarks, which have pushed benchmark Gujarat Shankar-6 cotton to between Rs 57,000 and Rs 58,000 per candy. Spinning mills and fiber traders were compelled to pass on the rising fiber costs despite sluggish downstream demand from weaving and knitting units.

Stakeholders say, sluggish apparel sales and persistent liquidity constraints are compounding operational pressures across the textile value chain. The domestic manufacturing sector is dealing with a complex environment where higher raw material costs clash directly with weak consumer off-take for finished fabrics,. Downstream garment manufacturers are struggling to absorb these increased yarn costs without harming export competitiveness, creating a delicate balancing act for regional textile mills striving to protect operational margins.