India/China – India’s cotton yarn exports to China quadrupled in the first nine months of the current calendar year due to the country’s emphasis on value added products in order to reduce cost of garment manufacturing.
Data compiled by the Ministry of Textiles showed that overall cotton yarn exports jumped to 222,052 tonnes between January – September 2012 as compared to 77,688 tonnes in the same period last year.
India, however, continued its position as the second largest cotton yarn exporter to China after Pakistan, this year again. Total cotton yarn exports to China from Pakistan was recorded at 391,556 tonnes in the first nine months of the current calendar year as compared to 202,310 tonnes in the corresponding period of the previous year.
“China is focusing more on cotton yarn in order save on labour cost which has been going to the roof for the last few months. Hence, instead of cotton, the country may import more of yarn going forward,” said Umang Kapasi, joint managing director of Comibatore-based Shri Vardhaman Cotton Corporation, which also operates as an indenting agent.
Meanwhile, India’s cotton exports in 2012-13 is expected to fall to 7 million bales compared to 12.8 million bales last year following sharp fall in Chinese demand, according to the Cotton Advisory Board (CAB) headed by the textile commissioner. Around 65 per cent of India’s cotton exports is shipped to China and thus this year due to lack of demand from China.
Meanwhile, 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.
Source: Business Standard