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India’s cotton yarn exports to grow at a moderate pace

As per ICRA report, though the pace of growth is expected to moderate this year, India is set to record a strong growth in cotton yarn exports during this fiscal. This revival in export demand has enabled ICRA’s sample of large spinning companies report a comfortable volumetric growth of 5 per cent year-on-year (Y-o-Y) in the first quarter of this fiscal, which has translated into a growth of nearly 12 per cent in sales turnover during the quarter.

Indian cotton prices increased at a relatively slower pace vis-a-vis international prices during the seven-month period ended May 2018, reporting a 6 per cent increase in US dollar terms vis-a-vis a 20 per cent increase in the international cotton prices during the same period.

While the strong Y-o-Y growth of 56 per cent in cotton yarn exports during the four months of the current fiscal is partly attributable to the low base effect. It has also been driven by competitive Indian cotton and yarn prices. Competition from Vietnam and China’s efforts to improve cotton availability is also likely to moderate the export demand for India’s cotton yarns in future.