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India's cotton yarn exports on track

From April 2013 to January 2014, India exported 1,082 million kg of cotton yarn. India's cotton yarn exports are meeting their targets barring the seasonal fluctuations generally witnessed every April in spite of high raw cotton prices. The high quality of Indian yarn is ensuring firm orders for Indian mills from international markets.

Exports of cotton yarn dropped during the last three years in the month of April and it happened in 2014, too. One of the reasons, in addition to the high year-end exports which cause a drop in April, is the temporary high cotton prices during this period.

There is an increasing anxiety in the industry due to China’s recent cotton policy.  China is the major importer of cotton and cotton yarn from India. Presently, the price difference between Indian and Chinese cotton is quite high with Indian yarn selling at much lower rates. In fact, prices of Indian cotton yarns after payment of duty and taxes in China are still much lower than Chinese domestic yarn prices.

Given the better quality produced by Indian mills it’s expected there will always be good exports of Indian yarns, even if the difference between Chinese cotton prices and international cotton prices narrows down substantially.