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Indian yarn industry grapples with 4Cs

  

The Indian yarn industry is currently grappling the problem of 4Cs that include China, COVID-19, Consumption and Collection.

The clash at the borders has the entire nation calling for boycotting Chinese goods and cancelling import contracts with Chinese businesses. However, the government is unlikely to take any step against trade with China as India has a largest trade deficit with China. The trade deficit between the countries in 2018/19 was $53.5 billiion.

But the government’s move o ban 59 Chinese apps has definitely, albeit temporarily, soured the sentiments regarding shipping yarns to China at this juncture. Suppliers are thinking twice about risking their shipment. . The fear psychosis is preventing any lift off in consumption in the country. Until people freely go for buying new clothes, the demand for yarns is unlikely to pick up. Brands also have large unsold inventories to clear. Hence, they are not likely to order for more yarns

Yarn prices haven’t changed much over the last fortnight. In some verticals, they have in fact eased a bit. Higher prices are not able to find any support. Low production capacity utilization at spinning mills is helping prices stay afloat. Factories are not running at full capacities and and LCs are delayed too. European buyers have booked decent quantities and so has Egypt.

 
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