Cotton Yarn Imports Increase
India and its yarn prices have seen a huge level of volatility over this year. It began with the ban of Chinese yarn by the United States over alleged Human Rights violations in the Xinjiang province of China against the Uyghur Muslims. Like a domino effect, this led to a big jump in import of yarn from outside of India. This largely happened due to imported yarn being much cheaper than the yarn that was available domestically.
All this increase in imports of cotton yarn has led to raised concerns among domestic textile mills since June of this year. M.A. Ramasamy, president of Powerloom Development and Export Promotion Council highlighted that Indian cotton yarn prices were extremely high and volatile. There has been a lot of uncertainty for weaving units as well due to this volatility.
With the data that is available, it has been recorded that cotton yarn imported in June of this year has almost increased by three times compared to the period in the year earlier. By July, imports of cotton yarn were several times higher as opposed to imports during July of 2021. Statistically, the numbers stood at 1.14 million kg in June of 2022 and 4.54 million kg in July of 2022. There is also caution that has to be practiced by importers as the United States has banned textiles that contain cotton from the Xinjiang province in China.
India and Indian textile units have generally imported only specialty yarns. While there were large number of imports from China, it is said that the recent hike is in fact mostly coming from Vietnam. As mentioned, Indian cotton and yarn prices had increased a lot since November of 2021, making it one of the primary reasons of increase in import of yarn from outside and units imported yarn wherever it was cheaper than domestic yarn. This was confirmed by Siddhartha Rajagopal who is the Executive Director of the Cotton Textiles Export Promotion Council (CTEPC). However, he added that yarn imports are looking to decline as Indian or domestic cotton prices have reduced, compared to earlier this year.
The chairman of Southern India Mills Association, Ravi Sam emphasized that India’s production of cotton yarn which was almost 340 million kg reflected in the amount of yarn that was overall imported which was relatively less. Despite this, he added that it should be a matter of grave concern regardless and that the government should remove import duties on cotton. According to him, this would help in keeping cotton and yarn prices under control.
