The Indian cotton yarn industry feeling the pressure as China has reduced its cotton yarn import after the announcement of China’s new cotton policy. India has witnessed drop by 25 percent in the month of April which is the effect of Chinese policy. Prior to the announcement of China’s policy, India export nearly 50 percent of yarn into China.

Last year the average exports was around 120 million kg which is mainly due to demand from China. But this April yarn exports has plunged to 90 million kg.

Although there is a demand for cotton yarn in domestic market, but the textile industry is concern over the downward demand flow from China as the industry has just managed to come out from the financial hardship of 2009-10.

Moreover, the new Chinese 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.

Hence, price has also become the main concern for Indian yarn exporters. But they are optimistic that the situation will soon change in their favour.

Indian yarn exporters are making all efforts to build up their presence in Bangladesh, Korea and Hong Kong to overcome the low demand trend going on in the industry.