Cotton yarn: Higher raw cotton prices keep yarn prices

Japanese-made cotton yarn prices have been in a stalemate since the middle of june. Despite the shrinking demand, higher raw cotton prices have put the brakes on the fall of cotton yarn prices. Prices of 20s carded yarn have moved consistently within the range of 45,500-46,500 yen since june 6. These prices went up to 46,500 yen on and after August 29. Even after the start of this year, the demand for towel applications has fallen by 20% from the year-ago level, while the demand for denim applications dipped by 42%. Consequently, there was an anticipation that these prices would decline to about 41,000 yen or the usual bottom price in August and September. Even so, these prices failed to fall because of higher raw cotton prices. In early September, New York cotton futures began to climb steeply and rose to 70 cents in response to the announcement made by China concerning the outlook for supply and demand. Whether or not China will increase cotton imports holds the key to the future course of the market. Japanese spinners continued to reduce production by more than 20% from a year earlier.