The cotton yarn market in North India is facing significant challenges due to slow demand and a liquidity crunch.
Selective buying has become the norm, and liquidity issues have worsened with the recent implementation of new payment rules for micro, small, and medium enterprises (MSEs). The cotton prices have seen a decline due to weaker demand both domestically and internationally, contributing to further pressure on the market. Despite this, cotton yarn prices have remained relatively stable, thanks to higher customs duties imposed on Chinese knitted fabrics, which have protected the local market to some extent.
In addition, demand in the Panipat home textile market has also weakened, affecting the prices of cotton comber and recycled polyester fibers. As a result, businesses in the region are grappling with declining profit margins, and the overall market sentiment remains cautious. These difficulties reflect the broader economic slowdown and financial challenges within the cotton yarn sector.
The liquidity crunch, combined with slow demand, has left many yarn producers struggling to manage their operations efficiently. While cotton prices have dropped, the stability in cotton yarn prices suggests that the market is somewhat insulated from the immediate effects of the price decline. However, the outlook remains uncertain as the industry continues to face tight financial conditions and weaker market dynamics.
