Overall rise on global commodity prices and weakening of the dollar took a toll on Indian yarn exports in May. Added to this were the fueling domestic prices of cotton and other raw material push yarn prices upwards. Raw cotton prices were up 19% in May compared to January 2008. They were a whopping 28% higher than last year. In similar comparison, cotton yarn prices moved up 11% since January and that of Man-made fibers increased at a moderate 2%. All these factors made Indian yarn uncompetitive in global markets which are already lulling due to slow down in USA markets.

Yarn exports declined 10% in May from their April 2008 levels. Export volume totaled 51,948 tons during the month. Unit price realization averaged US$ 2.88/kg which showed a drop of 12 cents a kg. Major declines in export were seen in viscose yarn followed by PC and polyester yarn. Cotton yarn exports too dropped 6.67% in May. The average price realization of cotton yarn was US$ 2.86 /kg, that for PC yarn was US$ 2.43 /kg and for viscose yarn it was US$ 3.33/kg. Average price realization of polyester yarn was US$ 2.76/kg and for PV yarn was US$ 3.03/kg.

Italy, one of the major importers of polyester staple fibre had imported around 126.269 thousand tons of polyester staple fibre in 2007, a decline of 5.11% in volume. Since 2003, Germany is the largest exporter of PSF to Italy except in 2006 when its share dwindled as Taiwan exported around 33.32 thousand tons to became the largest exporting country. On an average from 2002 to 2007, Germany had exported about 23.632 thousand tons to Italy, maintaining its share in the range of 17 – 22%.

Polyester Chain
Polyester chain saw some increase in its raw materials costs seeping down to polyester fibre and yarn prices. Paraxylene prices in Korea averaged at US$ 1391 per ton, an increase of 8.25% over previous month. PTA prices surged by 4.8% in the month and average at US$ 1031 per ton, whereas MEG prices declined by -0.6 %. MEG average prices in Korea hovered at US$ 1090 per ton