China is importing lesser yarn from India, waiting for cotton policy

China is now buying lesser yarn from India, putting Indian export under pressure. Moreover, buyers in China are insisting on lower pricing citing that Indian rupee has strengthened against US$. Over the past one month, Indian yarn export price to China has declined 6- 7 per cent and is hovering around US$3.30 a kg. Until January, China was importing about 110 -120 million kg yarn per month on an average.

T Rajkumar, chairman, Southern India Mills’ Association (SIMA) told a national daily that demand from China was in full swing till January. But since February, the offtake has started declining and in March there is a distinct difference in its imports.

Chinese buyers, is learnt, to have curtailed buying and were waiting for their government to announce its cotton pricing policy in the first week of April. Thus, according to SIMA chairman, importers are waiting now before they lift fresh yarn from India. Moreover, China has built up a good stock of yarn and will first liquidate that stock before placing fresh order.

Nevertheless, Rajkumar is optimistic that yarn exports will pick up from May provided the cotton pricing policy is in favour of India. China was buying huge volume from India to make towels, T-shirts, jeans and stockings. It is now focussing on high-value products instead of spinning yarn, which has opened up a huge market for Indian spinners and other suppliers of raw material.

DK Nair, secretary general, Confederation of Indian Textile Industry (CITI), echoes the same. “China is now looking at high-value products which will give them better margins,” he said.

Although China has slowed down imports from India, but has been lifting good quantities from Pakistan and Vietnam. For India, China is a big market but countries like Pakistan and Vietnam are also emerging suppliers of yarns.