Indian Cotton Yarn Seems Not Attractive To China

MUMBAI (Commoditiescontrol) – China continued to import lesser cotton yarn from India with volumes declining in October. However, it was reported that there was jump in arrivals of foreign yarns in China during the month and is expected going on in November. More importantly, Indian and Pakistani yarns could now be more competitive than Vietnamese or Indonesian yarns which are made of more expensive US, Australian and African cotton.

The recent fall of cotton prices in India and Pakistan could result in a return of their yarn exporters to China, as a result.

Cotton yarn export was at 66.7 million kg in October with 74 countries importing yarn worth US$203 million (Rs1,339 crore). The average unit price realization was at US$3.05 a kg, down US cents 5 from previous month and up US cents 29 from the same month a year ago.

China was the largest importer of cotton yarn from India in October, followed by Bangladesh and Portugal. The top three together accounted for more than 53 per cent of cotton yarn with combined volume at 38.3 million kg worth US$109.2 million.

Export to China declined 40 per cent year on year both in shipment and value during October. According to official trade statistics, China’s cotton yarn import totaled 1,450 million kgs during the period January to September 2016, down 20 per cent from the corresponding period of 2015. In similar comparison, imports from India declined 45 per cent to 302 million kgs of cotton yarn. However, its imports from Vietnam were up 23 per cent at 456 million kgs. Price wise, India was the cheaper supplier to China at an average of US$2.45 a kg compared to US$2.63 a kg from Vietnam. Nevertheless, Pakistan was the cheapest at US$2.21 a kg.

For India, Turkey, Brazil, Cambodia, Croatia and Ecuador were among the fastest growing markets for cotton yarn in October 2016, accounting for 2.8 per cent of total cotton yarn export value. Seven new destinations were added for cotton yarn export, of which, Switzerland, Russia, Paraguay and Costa Rica were the major ones.

Six countries did not import any cotton yarn from India, including Algeria, Czech Republic and Chile. They had imported yarns worth US$0.40 million in October 2015. In October 2016, significant deceleration was seen in export to Egypt, United Arab Emirates, Bahrain, Iran, Serbia And Montenegro.

(By Commoditiescontrol Bureau; +91-22-40015522)