The Cotton Textile Export Promotion Council (Texprocil), reported a 38.8 percent decline in the value of India’s cotton yarn exports, at $1.28 billion between July and September 2019, from $2.09 billion in the corresponding period last year. Cotton yarn exports have been steadily declining month after month this year, in volume terms, from 90 million kg in April to 67 million kg in September.

By contrast, demand for polyester yarn and fabric increased as these products are much cheaper than cotton. Industry estimates polyester to be 40-50 percent cheaper than cotton across all variants. Profitability of Indian polyester yarn manufacturers has been growing steadily. This is primarily on account of the rise in consumption of synthetic yarns across the world, as compared to natural fibers. Moreover, the cost competitiveness of Indian manufacturers has been better than that of Northeast Asia manufacturers, which has resulted in better operating margins and profitability.

In India, demand for polyester fibers has been growing strongly, led by steady consumption from textile firms. Moreover, domestic manufacturers of polyester yarns have been able to increase their capacity utilisation as the anti-dumping duty imposed on China led to a pick-up in domestic demand compared to imported yarns.