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Chinese firms opt to import yarn from India, Pakistan
Aug '12
Cotton spinning enterprises in China are willing to directly import cotton yarn from India and Pakistan in the absence of quota restriction on cotton yarn imports. The imported cotton yarn is, in turn, sold to downstream fabric and garment enterprises.
Textile enterprises in China are using imported cotton to the maximum extent possible due to a price difference of 4500-5000 Yuan/ton. Even after making additional payment for buying import quotas, the cost of imported cotton works out to be lower than domestic cotton prices.
However, cotton import quotas have been nearly consumed in the last two months, which has further pushed up the price of cotton import quotas.
Cotton yarn, on the other hand, is free from quota restrictions, which is making the companies to opt for importing cotton yarn, especially from India and Pakistan.
Industry analysts say several Chinese cotton spinning firms have shifted their production capacities to Southeast Asian countries, from where they are exporting the yarn produced there to China. This is likely to affect the competitive advantage of domestic textiles.
According to the data published by the General Administration of Customs, China’s cotton yarn imports rose by 78 percent year-on-year from January to May this year, while the country’s cotton yarn exports decreased by 9 percent during the same period.

Fibre2fashion News Desk - China

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