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Amid weakening of Vietnam cotton, India’s yarn export to China rebounds

Having fallen 21 per cent in volume terms and 14 per cent in value terms, the decline in spun yarn exports from India slowed down in November. Shipments of spun yarn of all kinds were 90.1 million kg worth $261.1 million or Rs, 1,733 crore implying per unit realisation of $2.90 per kg which was down US cents 11 from previous month and up US cents 24 as compared to November 2015. China’s cotton yarn imports from India recovered in November and demand stayed strong with shipments of Indian yarns piling up in different ports of China. Cotton yarns from Vietnam are suffering due to higher material costs as the country needs to import its cotton.

Once TPP is scrapped, Chinese investors could also opt out of spinning industry in Vietnam. This would mean Vietnamese apparel units will not enjoy duty-free access to the US market in the future. In November this year, 77 countries imported spun yarn from India, with China on top accounting for 39.8 per cent of the total value with imports declining 12.5 per cent in volume terms YoY and value edging down 4.3 per cent. Bangladesh was the second largest importer of spun yarns accounting for around 12.7 per cent of all spun yarn exported from India. Export to Bangladesh was down 37.6 per cent in volume and 32.2 per cent lower in value.

Pakistan was the third largest importer of spun yarns, which saw volume plunging 49.9 per cent while it was down 39.2 per cent in value. These three top importers together accounted for around 55.9 per cent of all spun yarns exported from India in November. China was the largest importer of cotton yarn from India in November, followed by Bangladesh and South Korea. The top three together accounted for more than 63 per cent of cotton yarn imported from India.