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Cotton Yarn Exports To Get A Major Boost In India

India’s cotton producers are getting positive vibes in regards to exports after the overwhelming increase in prices of fiber in the Chinese market by 25% than the prices in India. Despite the growing demand for raw cotton from Bangladesh, cotton exports of India remained subdued in the last year because of stagnant demand from China. Cotton being a primary agricultural crop of India, contributed significantly to the overall economy’s national income over all the years and captured the export market of the India, with heavy demand from countries like China and Bangladesh. But what are pinning new prospects for cotton exporters in India in the coming days despite declining in global demand for cotton in the last year is worth finding out.

Here are key facts pointing out why cotton exports would spur up in near future contributing a significant portion of country’s overall export income.

Governmental support

Considering the fall in the prices of raw cotton, the government has started intervening into the market for finding out a new market for exports. While the prices declined mainly because of a massive decline in exports to China, India’s biggest exporter due to their changing import policy, the government took steps to stabilise the matter. It eased the export of cotton and cotton yarn for boosting the overseas sales and initiated funds for setting up more units for spinning and yarn domestically as well as in cross-border countries to spur up the exchange of raw cotton and other textile products.

Variation in the quality of raw cotton

India’s cotton that was being auctioned in China is nearly 7 years old for which the quality of raw cotton is poor compared to that of China. Also, the quality of India’s raw cotton deteriorates gradually after two-three years with fibre start turning into yellow. Yet, that does not restrict China in buying raw cotton from India, because they blend it with their fresh cotton for textiles manufacturing. The prices they pay are hence their market rate, which is comparatively higher in India despite 3.5 percent of import duty imposed by China.

Auction in Chinese cotton market

Though India’s export gained due to factors like government support and higher prices in China, there is another factor too. The average price of cotton when translated into Indian price is relatively higher. Thus, the prices settled at the auction in China’s market equals to Rs. 51,000 and Rs. 56,000 for every 356 kilograms which is much higher than the price already prevailing in India i.e. Rs. 42,000. Thus, in accordance to costs, India’s cotton is much less costly than that auctioned.

Thus, along with the ambitious vision of growth for cotton spinning and textiles industry in India due to governmental support and ever-increasing domestic demands, there is a growing focus on exports of cotton after the prospective changes in China, India’s largest exporter of raw cotton. So, cotton and textile producers across the country, are looking ahead to successive growth in their earnings through foreign exchange in the coming years.

Author Bio: Mohit Tiwari is an ardent writer, who likes to explore different factors revolving India’s economy. He works for a popular fiber textile magazine of India, The Textile Magazine that keeps on highlighting industry’s day to day updates for its readers.