Cotton yarn exports to rise

Chinese imports to rise as they switch of value-added items

While estimates for cotton exports in 2012-13 have been lowered by the Cotton Advisory Board (CAB) following China’s decision to reduce import by half, export of cotton yarn to that country is on the rise.

Export of cotton yarn to China is expected to continue its uptrend as cotton available in that country is priced nearly 20 cents per pound more than in the international markets. Besides, wages are on the rise. As a result, China is now cutting on spinning activities and focusing more on value-added items.

“China is not only importing cotton yarn from India but also from Indonesia and Pakistan. We are definitely benefiting from this. Indian spinners are happy, as they are in a position to utilise their capacities as orders for yarn are pouring in,” said S P Oswal, chairman and managing director of the Vardhman group of industries.

CAB has pegged the target for cotton yarn exports at 920 million kg for the current year. Last fiscal, India exported 827.68 million kg of yarn, according to the Directorate General of Foreign Trade (DGFT). Till September this year, India exported 461.52 million kg, according to data released by DGFT.

India’s main cotton yarn destinations are China, Bangladesh, Korea and Hong Kong, of which around 30 per cent is shipped to China. It is the second highest export destination after Bangladesh.

“Despite China increasing its cotton yarn imports from India, Bangladesh will still remain India’s highest export destination this year. But this may change over a period of time if China continues to cut on its spinning activities,” said D K Nair, secretary general of the Confederation of Indian Textile Industry.

This cotton year (October 2012 to September 2013), cotton exports are expected to be around seven million bales, according to CAB, compared to 12 million bales last year.