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Cotton yarn exports: Knotty now, nice later

China, the largest importer of Indian cotton yarn, has reduced imports

Sharleen D’souza  |  Mumbai 

China, the largest importer of Indian cotton yarn, has reduced imports. from that country are either negotiating prices with exporters here or waiting for the prices to fall.

It is expected the arrival of the new cotton crop in the next month would lead to a decline in prices.

According to data from the Directorate General of Foreign Trade, registration of exports declined to 104.91 million kg in August, compared with 139.74 million kg in July.

For the benchmark 30's combed variety of cotton yarn, export prices rose to as high as $3.85 a kg. However, due to weak demand from and the fact that cotton prices have moderated in the domestic market, yarn exporters cut the export price to $3.64 a kg. Some yarn manufacturers have cut prices further, as the market is extremely competitive.

"Currently, domestic demand for is weak and Chinese buyers are aware of it. Therefore, they are taking advantage of the situation and pushing exporters to bring down prices," said S P Oswal, chairman and managing director of Vardhman Group, an integrated textile company.

In the past year, has reduced its cotton imports from India. However, it has increased imports, as production is India is cheaper and production of yarn in has fallen due to the rising wages in that country.

"Due to the high prices, many domestic buyers have put their on hold, waiting for prices to fall further. Even domestic players find the current price of high," said Bharat Malkan, a Mumbai-based trader.

The industry, however, says the lull on the export front is temporary.

First Published: Thu, September 26 2013. 22:32 IST
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