Spun yarn export growth falls in February, China imports lesser

Spun yarn exports were unable to maintain its strength seen in January as they grew just 3.7 per cent in February as against 21 per cent clocked in the previous month. About 117 million kg of spun yarns were exported worth US$390 million or Rs 2,425 crore during February. In terms of growth, volumes were up 7.4 per cent while US$ value increased 3.7 per cent implying a fall in unit price realization, as the Rupee depreciated 16 per cent against the US$ in the comparable months. Overall unit price realization averaged US$3.35/kg, down US cents 12 than the realization a year ago and US cent 1 down from previous month.

Cotton yarn worth US$335 million (Rs. 2,075 crore) was exported in February with volumes at 98 million kgs, implying unit price realization of US$3.42 a kg on an average during the month. This was US cents 8 down compared to same month a year ago. Combed cotton yarn accounted for 60 per cent of the all cotton yarn exported during the month with volumes at 53 million kgs. Carded yarn export was at 32 million kg. Their respective unit value realization was US$3.82 per kg and US$3.13 per kg. Open ended yarn export was at 10 million kg at an average price realisation of US$2.19 a kg.

Exports of cotton yarn to China declined 9 per cent in US$ terms while volumes were down 6 per cent. Bangladesh imported 2 per cent more cotton yarn in terms of US$ with volumes up 5 per cent. During the month, about 72 countries imported cotton yarn, of which, China and Bangladesh together accounted for over 46 per cent with combined volume at 49 million kg worth US$155 million. Egypt and Vietnam were the fastest growing larger markets for Indian cotton yarn in February ranking third and fifth largest importers.

Given the recent appreciation in the INR against US$ and Yuan falling, export of yarns is likely to shrink going ahead. Policy change in cotton buying by the government in China will also adversely impact India’s exports. In late February, the textiles minister K S Rao had acknowledged that overall textiles export target of US$43 billion is likely to fall short this financial year by about US$1 billion. Textile exports stood at US$34 billion in 2012-13 and the government had set an ambitious target of US$60 billion for 2014-15.