Cotton yarn price comparision India vs Pakistan vs China

Trends in

Cotton Yarn Prices vs. Trends in Cotton Prices on each market
Comparing Cotton Yarn Prices in India, Pakistan and China:

Last Twelve Months Statistical Report
24 June 2008
While textile material costs are further climbing in Asia, there are rising questions about the ability of spinners in passing such increases on to yarn processors. Thanks to its network of correspondents and after compiling data collected in the last twelve months, EmergingTextiles.com now releases a comparison of latest trends in cotton yarn prices in China, India and Pakistan. Results are dramatically diverging depending on markets with strong consequences for downward clothing producers.
With cotton and polyester prices now clearly rising in Asia, spinners may find it difficult to pass such an increase in their raw material costs on to their customers.
Compiling data which were collected in the last twelve months, we compared trends in cotton yarn prices in the three major textile producing countries in Asia.
For each market (India, Pakistan, China), we selected prices of benchmark products, i.e. 30s carded for knitting in India and Pakistan and 32s carded for knitting in China.
Due to differences in domestic currencies -and less importantly in units used on each market-, we built an index for the last twelve months (June 2007=100).
Sharply Different Trends
Sharply different results were obtained for each market.
Yarn prices rose only 3% in China while being up 6% in India and no less than 28% in Pakistan.
We also compared these trends in yarn prices with the simultaneous change in raw material costs, i.e. cotton lint prices on the three domestic markets.
Once again, we selected the most scrutinized product prices, including 328 grade in China, Shankar 6 in India and KCA Spot Rate in Pakistan.
While cotton prices only rose 5% on China's domestic market, they surged 33% in India and no less than 46% in Pakistan.
Comparing cotton price trends with yarn price trends helped in assessing if spinners were able maintaining their margins.
Sharp contrasts may be observed depending on countries.
While Chinese spinners take advantage of the stability in cotton prices, Pakistani margins are more clearly affected by the rise in domestic cotton prices.
Indians are Most Hurt
The most hurt are Indian spinners who did not really raise their prices while suffering from a sharp rise in their costs, as reflected by our last table at the bottom of our report.
These statistical data may have been different for finer counts or combed yarns, obviously.
They do not reflect trends in yarn export prices, in addition, where the change in currency values is also affecting margins of exporters.
Our data however confirm the way Indian spinners are negatively affected by the rise in domestic cotton prices.
They are also confirming that China's clothing exporters may find some relief, in terms of competitiveness, in a comparatively lower rise in domestic cotton prices, while being negatively affected by the yuan's rise and by higher labor and energy costs in the country.