India’s cotton yarn export is estimated to have declined by 15 per cent during 2014-15, with a steep fall in shipments to China, which normally takes 40 per cent of the total. In the first nine months of the financial year (April-December 2014), data compiled by the Union textiles ministry showed a six per cent fall in the export, at 891 million kg as compared to 946 million kg in the same period a year ago. The fall accelerated afterwards. In 2013-14, cotton yarn export was 1,303 million kg.
Falling exports has meant excess supply with spinning companies. Recovery is not expected soon. Domestic and export demand from non-conventional markets must pick up for that. Yarn export to China declined by 20 per cent due to a slow down in textile industry. Exporters have tried to compensate from elsewhere and there has a been a slight rise in yarn exports to Sri Lanka, Bangladesh and Vietnam in recent months. India has signed a $300 million export deal with Vietnam, which includes cotton yarn.
Efforts are on to raise cotton yarn exports to other countries. If one large order clicks, India will be able to achieve last years figures, feels Kiran Soni Gupta, Textile Commissioner, Ministry of Textiles. Import from China has slowed over the past two years, due to shifting of labour from manufacturing industries like textiles to service industries like engineering, for higher remuneration. Import has risen to other countries but the decline in export to China will be difficult to compensate. Hence, the expectation is of a overall decline.
Industry experts estimate yarn export in 2014-15 to fall 15 per cent to 1,150 million kg. With massive buying at the minimum support price by Cotton Corporation of India (CCI), prices of cotton have risen 10 per cent in two months. However, yarn prices are flat. The benchmark 40-comb has been quoted at Rs 218 a kg for a little over three months, with a minor volatility of Rs 1-2 a kg, despite relatively high prices in global markets.
Textile makers' margins are expected to remain under pressure due to elevated cotton prices. Apparel exporters have used the opportunity from lower yarn prices to raise export. This is estimated at $16.75 in 2014-15, as compared to $15 billion a year ago.
