Cotton yarn exports to touch record high in FY13

This financial year, cotton yarn exports are expected to touch an all-time high, owing to good demand from China. Textile Commissioner A B Joshi said in 2012-13, about 1,000 million kg of yarn was expected to be exported. Earlier, he had estimated cotton yarn exports at 920 million kg. Last year, exports stood at 827.68 million kg.

During the April-December period, 758 million kg had been exported, 20 per cent higher compared to the year-ago period, according to sources in the textile commissioner’s office. In April-November, cotton yarn production stood at 2,317 million kg, 14 per cent higher compared to the year-ago period.

China accounts for 30 per cent of India’s cotton yarn exports, while Bangladesh accounts for 16 per cent. This year, Bangladesh cut its imports three to four per cent. China imports a substantial amount of cotton yarn from India, as the cost of production in that country is higher, owing to high cotton prices. This led to a rise in demand for yarn from domestic companies. “Pakistan’s production has fallen 30 to 40 per cent, as it doesn’t have gas to run its plants, causing India’s orders to rise,” said Kailash Lalpuria, executive director of Indo Count Industries.

Currently, 30s combed cotton yarn from India is exported at $3.5 a kg, while the 40s count variety is exported at $4 a kg. In India, cotton is priced at 85 cents/pound, while the price of cotton in China is $1.4/pound. This makes it viable for Chinese companies to import cotton yarn from India, as the cost of spinning cotton to yarn is lower in India. As wages, too, are rising in China, the country is now cutting spinning activities and focusing on value-added items.

At the Cotton Advisory Board meeting yesterday, the textile commissioner had said this year, cotton exports would stand at eight million bales (a bale is 170 kg), compared with 12 million bales last year. This was primarily because China was de-stocking the cotton it had reserved.