Due to the resurgence of demand in China, Indian cotton yarn export registrations have jumped 55% in the first four months of this fiscal year. If this trend continues, cotton yarn exports may hit a new record this year.
Data compiled by the Directorate General of Foreign Trade of India show that in April-July 2013, traders and exporters registered 488.15 million kilograms, compared with 314.19 million kilograms in the same period last year. Cotton yarn export registrations have almost doubled from 245.84 million kilograms in April-July 2012.
DK Nair, secretary-general of the Federation of Indian Textile Industry, said that if this trend continues, cotton yarn exports this year will exceed all previous expectations.
According to reports, the Cotton Yarn Advisory Committee predicts that India’s cotton yarn exports will increase by 14.2% this fiscal year to 1.15 billion kilograms. But actual exports may be higher. Overall cotton yarn production this year is estimated at 4 billion kilograms.
Arun Sakseria, a Mumbai-based cotton merchant and exporter, said the Chinese government’s cotton import duties and local taxes add up to about 40%. In contrast, the import tax on cotton yarn is only 7-8%. Therefore, importing cotton does not make sense for Chinese textile mills.
China produces 6.7-7 million tons of cotton each year, compared to consumption of 9.5 million tons. China has formulated policies to fill the gap through zero-tariff imports, while increasing imports are subject to very high tariffs.
