Cotton yarn export from India is estimated to have declined by 15% during 2014-15 due to steep fall in imports from China, the perennial buyer constituting over 40% of textile raw material shipment from India.

India's cotton yarn export to China has declined by over 20% due to ongoing slowdown in textile industry there.

But, Indian exporters' renewed efforts to compensate at least a part of Chinese decline yielded a marginal improvement in cotton yarn exports to other countries including Sri Lanka, Bangladesh and Vietnam.

Exports to these countries have risen in the last few months which compensated at least 5% decline in exports to China. The decline in raw material export is set to benefit local weaving and garmenting units both in terms of employment generation and focusing more exports of finished products like apparel.

"India is exploring ramping up cotton yarn exports to other countries like Sri Lanka, Vietnam and Bangladesh as demand from China has slowed down. In the process, India has signed a $300 million export deal with Vietnam which includes cotton yarn as well. Efforts are on to raise cotton yarn exports to other countries as well. If one large order clicks, we will be able to achieve last year's figure," said Kiran Soni Gupta, Textile Commissioner, Ministry of Textiles.

Data compiled by the Ministry of Textile showed 6% decline in India's cotton yarn exports at 890.55 million kgs between April - December 2014 as compared to 946 million kgs in the same period previous year. During the full financial year 2013-14, however, cotton yarn export from India was reported at 1303 million kgs.

"Import from China has slowed down over the last two years due to shifting of labourers from manufacturing industry like textiles to service industries like engineering for higher remuneration. At the same time, import from other countries like Sri Lanka, Bangladesh and Vietnam has increased. But, the decline in export to China will be difficult to compensate.

Hence, we are estimating an overall decline in cotton yarn exports," said D K Nair, Secretary General, Confederation of Indian Textile Industry (CITI). Conservatively, we can estimate 15% decline in cotton yarn exports, an industry expert said.

Lower export has in fact increased availability of cotton and yarn availability for local weaving and fabric manufacturing units. But, because of massive minimum support price (MSP) operations by Cotton Corporation of India (CCI), prices of cotton remained elevated translating thereby higher price of cotton yarn for domestic weavers.

"Cotton yarn prices remained flat with the benchmark 40 combed is quoted at Rs 218 a kg for over three months with a minor volatility of Rs 1-2 a kg despite relatively high prices in global markets. Thus, export of both cotton and yarn has become difficult," said Arun Sakseria, a city - based cotton yarn exporter.

Textile players have built a massive spinning capacity over the last few years. But, due to fall in exports, their margins are expected to remain under pressure due to elevated cotton prices with the benchmark Shankar 6 trading currently at Rs 9111 a quintal now, a marginal 1.4% decline from Rs 9251 a quintal early this year.

Meanwhile, apparel exporters have started reaping benefit. Apparel export from India during FY 14-15 is estimated to have stood at $16.75 billion as compared to $15 billion during last year, witnessing thereby increase of 10%.

"Apparel export, therefore, has eaten up a marginal decline in cotton yarn exports during the financial year 2014-15," said Vijay Mathur, Additional Secretary General, Apparel Export Promotion Council.

Source:business-standard.com