Demand for yarn and cotton dwindling this year

The year 2014 has proven to be a downfall for the trade of cotton and other textiles. This trend has hit the international markets to a huge extent. The demand for yarn and cotton suddenly started dwindling this year. Yarn prices have receded. Sticky domestic cotton prices are elevated. The sales of these materials are unresponsive now- a – days. Profit margins are restrained.

The restrained profit margins are due to the decision of spinning mills of depleting the use of low cost raw cotton. As a result, they need to buy cotton at a huge outlay lowering the yarn prices. This will also make profits of spinning mills reach a moderate level.

The growth momentum is predicted to slow down whose signs are already been shown by the international trading market. Also with China’s predictable policy the cotton and yarn prices may go down considerably even in terms of global marketing.

China is providing support to its farmers through subsidies by brushing aside the technique of stock holding. This can turn out to be a huge loss for India as China’s decision can affect Indian yarn and cotton prices ultimately.

The rich fortunes of spinning mills are finally reaching its doomed stage. With rise in cotton prices as well as the cost of overhead items in the last few months, this moderate profit stage is sure to arrive.