China policy hits cotton yarn exports from India
Updated: May 06, 2014 01:28:58pm
New Delhi, May 6 (KNN) China's new import policy has hit India's cotton yarn exports significantly to the neighbouring country dealing a blow to the domestic industry.
Considering that the change in Chinese policy has come at a time when cotton consumption within the country is rising and when exports of finished yarn is on the rise, industry officials think the move would result in larger than the anticipated six per cent drop in export of raw cotton, media reports said.
Cotton importing countries around the world have been watching closely as the neighbouring giant has brought to an end a stockpiling scheme under which it has amassed more than 10 million tonnes of the fibre which is around 60 per cent of global cotton inventories.
The policy had considerably increased import demand by removing cotton from the domestic market and pushing up local prices.
With cotton exports dropping year on year, exporters are worried if they will be able to export more than 7 to 7.5 million bales this year, reports said.
The world's largest cotton importer, China accounts for more than 60 per cent of total raw cotton exports from India, while the rest is exported to Bangladesh, Pakistan and Vietnam.
Being the world's second largest producer and exporter of cotton, India has shipped a total of around 8.2-8.5 million bales thus far in 2013-14. This was expected to grow to around 9.2 to 9.5 million bales by September, according to industry officials.
The country's cotton year runs from October to September. Due to harvest cycles, the vast majority of exports typically occur in the first half of the Indian crop year.
India exported 10.1 million bales in the 2012-13 year, falling from 12.9 million bales the year before.
Reports also say that in February, China imported 147,317 tonnes of cotton from India, down 20 per cent from the previous month. Further, in January it announced that it would scrap cotton stockpiling, instead trialling direct subsidies for farmers.
This has raised serious concerns among industry here which has noticed significant reduction over the past two months in Chinese buying from India.
Further, to speed up stockpile sales, China from early this month has reduced the state sale floor price.
In the meantime, consumption of raw cotton by Indian mills has increased to 25.8 million bales in 2013-14 from 25 million bales a year ago owing to increasing demand from textile makers as the global economy shows signs of recovery.
The trend according to industry experts is likely to continue with consumption of domestic mills expected to reach 30 million bales in the next crop year. According to reports, in 2011-12, demand from mills totalled 22.3 million bales. (KNN/ES)
Considering that the change in Chinese policy has come at a time when cotton consumption within the country is rising and when exports of finished yarn is on the rise, industry officials think the move would result in larger than the anticipated six per cent drop in export of raw cotton, media reports said.
Cotton importing countries around the world have been watching closely as the neighbouring giant has brought to an end a stockpiling scheme under which it has amassed more than 10 million tonnes of the fibre which is around 60 per cent of global cotton inventories.
The policy had considerably increased import demand by removing cotton from the domestic market and pushing up local prices.
With cotton exports dropping year on year, exporters are worried if they will be able to export more than 7 to 7.5 million bales this year, reports said.
The world's largest cotton importer, China accounts for more than 60 per cent of total raw cotton exports from India, while the rest is exported to Bangladesh, Pakistan and Vietnam.
Being the world's second largest producer and exporter of cotton, India has shipped a total of around 8.2-8.5 million bales thus far in 2013-14. This was expected to grow to around 9.2 to 9.5 million bales by September, according to industry officials.
The country's cotton year runs from October to September. Due to harvest cycles, the vast majority of exports typically occur in the first half of the Indian crop year.
India exported 10.1 million bales in the 2012-13 year, falling from 12.9 million bales the year before.
Reports also say that in February, China imported 147,317 tonnes of cotton from India, down 20 per cent from the previous month. Further, in January it announced that it would scrap cotton stockpiling, instead trialling direct subsidies for farmers.
This has raised serious concerns among industry here which has noticed significant reduction over the past two months in Chinese buying from India.
Further, to speed up stockpile sales, China from early this month has reduced the state sale floor price.
In the meantime, consumption of raw cotton by Indian mills has increased to 25.8 million bales in 2013-14 from 25 million bales a year ago owing to increasing demand from textile makers as the global economy shows signs of recovery.
The trend according to industry experts is likely to continue with consumption of domestic mills expected to reach 30 million bales in the next crop year. According to reports, in 2011-12, demand from mills totalled 22.3 million bales. (KNN/ES)
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