Chinese policy causes a 25% fall in India's April cotton exports

KOLKATA: The Indian cotton yarn industry is in a spot. The recently announced Chinese cotton policy has made cotton yarn exports to the Dragon country unattractive thus denting Indian yarn exports by 25% in the month of April.

Though the demand of cotton yarn in domestic market is showing some recovery but the textile mills say that the robust growth is yet to be felt thus raising concern for the industry which has just come out from the financial hardship of 2009-10.

Talking to ET, SP Oswal, chairman and managing director, Vardhaman Group said, “Last year the average exports was around 120 million kg. This was largely driven by Chinese demand. But this April yarn exports has come down to 90 million kg. Chinese cotton policy is one of the major reasons for a drop in cotton yarn exports from the country.” China accounts for nearly 50% of the yarn exports from India.

China has reduced its cotton yarn import volumes from India in the last two months, which has put Indian yarn exports under pressure. According to the new policy which has come effective from April 1, the government has lowered cotton auction bids to 17,250 Yuan per tonne, down 4.2% from its floor price of 18,000 Yuan per tonne.

“Price is the main concern for Indian yarn exporters. But we are hopeful things will start changing shortly. Indian yarn exporters are also trying to beef up their presence in Bangladesh, Korea and Hong Kong,” said K Selvaraju, secretary general, Southern India Mills Association (SIMA).