In August 2024, the prices for Asian Viscose Filament Yarn (VFY) remained elevated, driven by strong export demand across the region. The surge in VFY exports significantly influenced overall pricing, particularly in the Indian market, where VFY prices rose by approximately 1%. This increase was largely attributed to the heightened international demand for VFY. Despite the upward trend in VFY prices, the cost of the primary feedstock, wood pulp, remained low across the Asian market, due to decreased demand from its major consuming sector, paper mills.

In contrast, the prices of auxiliary chemicals essential for VFY production, such as sodium hydroxide and sulfuric acid, increased notably in the Indian market, both rising by around 4%. However, these cost hikes did not translate into higher VFY prices, as the low wood pulp prices helped offset the impact of rising chemical costs.

The international market for VFY remained robust throughout August, further bolstered by political instability in Bangladesh, a key player in the Southeast Asian textile sector. The political turmoil fin Bangladesh redirected demand towards domestic producers in India, particularly benefiting markets like Indore. Indore, a major hub for ready-made apparel in central India, is anticipating a business surge of over 20% this festive season due to the influx of orders from new clients, a shift influenced by the situation in Bangladesh.

In addition to this, Tiruppur, another significant player in India's textile industry, is targeting a 20% growth in garment exports this financial year. According to chairman of the India Knit Fair Association, Tiruppur's garment exports reached ?33,500 crore last fiscal year, with expectations of reaching ?38,000 crore this year. Despite ongoing global conflicts, such as those in Ukraine and Israel, export volumes from Tiruppur have remained unaffected. Over the last four months, there has been a steady increase in garment exports, a trend that is expected to continue. Moreover, manufacturers in Tiruppur are increasingly sourcing yarn from various parts of India, contributing to the industry's resilience.

Knitwear exports from Tiruppur also saw a significant rise, with a ?400 crore increase in the quarter ending in July. India's overall apparel exports grew by 13.8% in July, with Tiruppur's exports to key markets like the USA, Australia, Korea, Japan, and Europe showing substantial gains.

Furthermore, recent customs data revealed that China's fiber, textile, and apparel exports performed well, with a 9% year-on-year increase from January to July 2024. Fiber and yarn exports alone saw a 3% rise during this period. Analysts anticipate that VFY prices will continue their upward trend in September 2024, driven by improving export orders and sustained demand.