Silk exports likely to fall 20-25% in 2011-12

KOLKATA: Steep increase in yarn prices have turned silk fabric exports uncompetitive, which may lead to a fall in exports by 20-25 per cent in the current fiscal.

"Silk yarn prices have shot up more than 100 per cent making exports un-competitive in the international market. We expect export to come down by at least 20-25 per cent in quantitative terms this fiscal over 2010-2011," Vikram Tantia, president Silk Association of India said.

In the first six months of this fiscal, exports were already down by 35 per cent in quantity as well as value terms, he said, adding that there has been a declining trend in the last three years in the export of silk fabric.

Exports over the last three years came down by 50 per cent in quantity terms, Tantia said.

However, the association expects exports to go up in the second half with rupee depreciation creating some positive impact. The rupee has depreciated by around 20 per cent in the recent months and so it would positively impact the bottom line of the exporters.

Silk yarn prices, which were USD 25 a kg in September 2010 peaked up to USD 58 a kg in 2011. China accounts for 80 per cent of silk yarn imported by India, Tantia said.

The year 2010-2011 ended with an export worth around USD 560 million.