Indian yarn exports to China have slowed down because China has begun offering a lower price for Indian yarn on ground that rupee has strengthened against the dollar. Chinese price for Indian yarn has declined by 6 per cent to 7per cent over the past one month and is now quoting at 3.30 dollars per kg.

Also China is expected to announce its cotton pricing policy in the first week of April, due to which importers are taking a wait and watch approach before they place fresh yarn orders from India. With country’s famous cotton stock piling policy, it has also built a good stock of yarn, so they are expected to utilize the available stock before place new buying orders.

Of late, China has been importing cotton yarn from India to make towels, T-shirts, jeans and stockings. The country is now focusing on high-value products instead of spinning yarn, which has opened up a huge window of opportunity for Indian suppliers of the raw material. India has produced 5,210 million kg spun yarn in 2013. Of this, 3,847 million kg is cotton yarn. In the same period, the country has exported 1,366 million kg yarn, which is 42per cent higher than that of 2012. However, though Chinese demand for Indian yarn has slowed down, there has been good offtake from Pakistan and Vietnam.