Robust rise in India's cotton yarn exports to China

30 Oct '12

2 min read

India’s cotton yarn exports to China are growing at fast pace on account of latter’s efforts to cut costs.

From January to September 2012, India’s cotton yarn exports to China grew to 222,052 tons, which is significantly more than 77,688 tons of yarn exported during the same period last year, Ministry of Textiles’ data shows.

The rise in cotton yarn exports is mainly due to China’s efforts to cut spiralling labour costs. Since China is focusing more on manufacturing of value-added items to cut costs, it is expected to import more yarn, instead of cotton, in future.

Accordingly, India’s overall cotton exports is expected to plummet from last fiscal’s 12.8 million bales to 7 million bales this fiscal, as presently around 65 percent of India’s cotton exports are towards China.

Cotton in China costs around 20 cents per pound more than in world markets, which forces the Chinese industry to reduce spinning activities and lay more emphasis on value-added goods, according to experts.

India’s Cotton Advisory Board (CAB) has estimated the country’s overall cotton yarn exports to reach 920 million kg during the current year, as against its last year’s exports of 827.68 million kg.

Meanwhile, the Directorate General of Foreign Trade (DGFT) data shows that the country exported 461.52 million kg of cotton yarn by September this year.

Besides India, China also imports cotton yarn from Indonesia and Pakistan.

Retaining its position as the biggest yarn exporter to China, Pakistan exported 391,556 tons of cotton yarn to China during January-September this year, against its exports of 202,310 tons made during the same period last year.

Though India failed to outshine Pakistan in terms of cotton yarn exports during the period under review, Indian spinners are viewing the demand from China as a welcome opportunity which would allow them to utilise more of their capacities.

Fibre2fashion News Desk - India

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