Cotton yarn prices have registered their first major decline this year, offering relief to Tiruppur’s knitwear and textile industry in Tamil Nadu after months of rising raw material costs that had put manufacturers and exporters under severe pressure.

The reduction follows the Central government’s decision to temporarily exempt cotton imports from customs duty between June and October, a measure aimed at increasing supply and stabilising prices in the domestic market.

Industry sources said cotton yarn prices have fallen by around Rs 10 per kilogram across various counts, reflecting a broader decline in cotton prices. The development is being viewed as a positive sign for the textile and apparel sector, which has been struggling with escalating input costs since the beginning of the year. Domestic cotton prices have also witnessed a significant correction.

The price of cotton has declined to around Rs 63,000 per candy (356 kg), compared to nearly Rs 69,000 per candy before the Centre announced the import duty exemption. The fall in cotton prices has had an immediate impact on yarn rates, benefiting spinning mills, garment manufacturers and exporters.

The Tiruppur knitwear cluster, one of India’s largest textile and apparel export hubs, had been particularly affected by the sustained increase in cotton and yarn prices. Between January and May, yarn prices rose by nearly Rs 65 to Rs 70 per kilogram, substantially increasing production costs for manufacturers.

Cotton, which was trading at around Rs 54,000 per candy earlier in the year, had climbed sharply over recent months due to tightening supply and higher global prices. The increase in raw material costs had triggered concerns among exporters and domestic garment producers, many of whom feared that higher prices would affect their competitiveness in international markets and reduce profit margins.

With the latest decline in cotton and yarn prices, manufacturers expect some easing of pressure on production costs. The reduction is likely to benefit the entire textile value chain, from spinning and knitting units to garment exporters and retailers.

Industry observers believe the correction could continue in the coming weeks if cotton imports increase and market supplies improve further. Expectations remain high that cotton prices may soften further during the duty exemption period, leading to additional reductions in yarn prices.

While the industry views the development as temporary relief rather than a complete solution, the fall in yarn prices is expected to provide much-needed support to textile manufacturers and exporters as they navigate challenging market conditions and uncertain global demand.