Search
Info Center
Home > Info Center > CCSE Review
Return
ReturnAn Indian trader's view on cocoon and silk market
Author：
admin
PublishDate：
2005-08-22 08:36:00
Hit：
493
(BY GLOBAL SOURCING CONSULTANTS)
The past two weeks for raw silk have been very active and interactive and we have seen so many changes in the raw silk price that it has baffled many importers in India.
The correction on the jiaxing exchange has led to a change in sentiments and created confusion resulting in reduced buying - almost to nil from china.
Analyzing the reasons we can see that the cargo arriving in India is in the range of usd 21-23 as of now so the current Indian market prices at INR 1320 (abt usd 22.60) is reasonable but it has dropped from INR 1400 (abt usd 23.95) to this level in a span of a week.
The coming weeks will see arrivals of cargo priced above usd 23 and we need to see the way the local market adapts to the prices. it may remain stable if the same is seen in china also however if the Chinese prices go further down it will certainly affect the pricing here also . Stability is the need of the market now and stability is what we should witness in china with export CIF prices ranging from usd 23-25 levels till the autumn cocoons.
The forthcoming Indian crop is also very good however due to Consistent rains in the region the production is low but if the climate improves and the output of silk yarn also improves, the Indian raw silk price will drop at least by usd 2 locally which may influence the importers also to delay their imports of Chinese raw silk. However if the rains continue then we can witness a kind of panic buying of Chinese raw silk, added to this the upcoming wedding season in India from next month till Jan 2006 will see a steady demand in silk products in India leading to a healthy and stable trend of imported Chinese silk yarn.
It may also lead to a demand but as such the prices are high now so we need to maintain these levels for some time till the real demand comes out, which will help in allowing the Indian market to absorb price levels of usd 24 and above.
The Indian silk fabric industry does not have the capability to sustain prices above usd 23 and whenever we see the prices going above INR 1350 (abt usd 23.10) we see a reduction in demand and almost a backlash from the local fabric silk industry. However since the silk season is coming up we may see new highs this year as cocoon reports from china are not encouraging, the high rates may be for a short while but it looks a certainty if the autumn cocoons in china are not sufficient enough or lower than the earlier crops.
Dupion silk yarn also has seen a increase in the price but the normal difference between these two item was always usd 2 but now we see a diff of almost three and above so we can assume that dupion still has the space to rise further and narrow the difference with raw silk to usd 2. The local demand for dupion is steady now after a gap of almost a year.
Tussah silk yarn has always been above raw silk about usd 2-3 but now we see equal prices to raw silk so tussah fuelled with the shortage in china can shoot up by almost usd 2-3 i.e., above usd 27 in the coming weeks without any problems. In the forthcoming season lot of dress products will be made on tussah silk fabric leading to a good demand locally for tussah yarn
Finally and above all the new excess duty on imported Chinese yarn of 8% has been waived off for now and we can breathe easily and keep on doing business as usual.
NOTE : THE ABOVE OPINION ARE STRICTLY THE PERSONAL OPINION OF SURESH MEHTA AND ANY DECISION BASED ON THIS CONTENT ARE ENTIRELY AT YOUR OWN RISK AND SURESH MEHTA WILL NOT BE HELD RESPONSIBLE IN ANY MANNER
The past two weeks for raw silk have been very active and interactive and we have seen so many changes in the raw silk price that it has baffled many importers in India.
The correction on the jiaxing exchange has led to a change in sentiments and created confusion resulting in reduced buying - almost to nil from china.
Analyzing the reasons we can see that the cargo arriving in India is in the range of usd 21-23 as of now so the current Indian market prices at INR 1320 (abt usd 22.60) is reasonable but it has dropped from INR 1400 (abt usd 23.95) to this level in a span of a week.
The coming weeks will see arrivals of cargo priced above usd 23 and we need to see the way the local market adapts to the prices. it may remain stable if the same is seen in china also however if the Chinese prices go further down it will certainly affect the pricing here also . Stability is the need of the market now and stability is what we should witness in china with export CIF prices ranging from usd 23-25 levels till the autumn cocoons.
The forthcoming Indian crop is also very good however due to Consistent rains in the region the production is low but if the climate improves and the output of silk yarn also improves, the Indian raw silk price will drop at least by usd 2 locally which may influence the importers also to delay their imports of Chinese raw silk. However if the rains continue then we can witness a kind of panic buying of Chinese raw silk, added to this the upcoming wedding season in India from next month till Jan 2006 will see a steady demand in silk products in India leading to a healthy and stable trend of imported Chinese silk yarn.
It may also lead to a demand but as such the prices are high now so we need to maintain these levels for some time till the real demand comes out, which will help in allowing the Indian market to absorb price levels of usd 24 and above.
The Indian silk fabric industry does not have the capability to sustain prices above usd 23 and whenever we see the prices going above INR 1350 (abt usd 23.10) we see a reduction in demand and almost a backlash from the local fabric silk industry. However since the silk season is coming up we may see new highs this year as cocoon reports from china are not encouraging, the high rates may be for a short while but it looks a certainty if the autumn cocoons in china are not sufficient enough or lower than the earlier crops.
Dupion silk yarn also has seen a increase in the price but the normal difference between these two item was always usd 2 but now we see a diff of almost three and above so we can assume that dupion still has the space to rise further and narrow the difference with raw silk to usd 2. The local demand for dupion is steady now after a gap of almost a year.
Tussah silk yarn has always been above raw silk about usd 2-3 but now we see equal prices to raw silk so tussah fuelled with the shortage in china can shoot up by almost usd 2-3 i.e., above usd 27 in the coming weeks without any problems. In the forthcoming season lot of dress products will be made on tussah silk fabric leading to a good demand locally for tussah yarn
Finally and above all the new excess duty on imported Chinese yarn of 8% has been waived off for now and we can breathe easily and keep on doing business as usual.
NOTE : THE ABOVE OPINION ARE STRICTLY THE PERSONAL OPINION OF SURESH MEHTA AND ANY DECISION BASED ON THIS CONTENT ARE ENTIRELY AT YOUR OWN RISK AND SURESH MEHTA WILL NOT BE HELD RESPONSIBLE IN ANY MANNER
