A study by the Cotton Textiles Export Promotion Council (Texprocil) has revealed that India’s cotton yarn exports are meeting the targets set, barring the seasonal fluctuations generally witnessed every April and inspite of high raw cotton prices.
India exported 1,082 million kg of cotton yarn valued at $3.75 billion in the first 10 months (April-January) of 2013-14. It is estimated that cotton yarn exports for 2013-14 would be around 1,350 million kg valued at $4.70 billion. The high quality of Indian yarn is ensuring firm orders for Indian mills from the international markets.
Cotton yarn exports dropped in April during the last three years, and it happened this year too. One of the reasons, in addition to the high year-end exports which cause a drop in April, is the temporary high cotton prices during the period. Last year as well as this year, cotton exports in March and April have gone above the international prices for cotton upto 40s count. The current Indian prices are higher than international prices and imports of 1-1/8 inch cotton are taking place on a big scale.
There is growing anxiety among industry circles due to the recent Chinese cotton policy changes since that country is a major importer of cotton and cotton yarn from India. Presently, the difference between the Indian and Chinese cotton prices is quite high, with the Indian yarn selling at much lower rates. In fact, Indian cotton yarn prices after payment of duty and taxes in China are still very much lower than the Chinese domestic yarn prices.
Says Mr. Manikam Ramaswami, Texprocil Chairman: “Given the better quality produced by Indian mills there will always be good exports of Indian yarns taking place, even if the difference between Chinese cotton prices and international cotton prices narrows down substantially. Indian mills need not fear a drop in yarn exports happening beyond the seasonal fluctuations. However, profitability of exports will depend upon our price parity with International cotton prices.”
Established in 1954 as an autonomous, non-profit body dedicated to promotion of exports, Texprocil facilitates exports from India of raw cotton, cotton yarns and blended yarns, woven and knitted fabrics, home textiles and technical textiles. The Council provides export promotional services to over 3,500 members, including composite mills, spinning, weaving and knitting units, process houses and merchant exporters who collectively generate turnover worth billions of dollars.