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As China focuses on the export of value-added products, aiming to reduce garment production costs, India’s cotton yarn exports to China have quadrupled in the first nine months of the fiscal year.
According to data compiled by the Ministry of Textiles, India’s overall cotton yarn exports soared to 222,052 tons in January-September 2012, compared to 77,688 tons in the same period last year.
However, this year India still exports cotton yarns to China after Pakistan. In the first nine months of the fiscal year, Pakistan exported 391,556 tons of cotton yarn to China, compared to 202,310 tons exported during the same period last year.
China pays more attention to cotton yarn imports and aims to reduce labor costs.
At the same time, according to the Indian Cotton Advisory Committee, due to the sharp drop in Chinese demand, India’s cotton exports in 2012-13 are expected to drop to 7 million bales, compared with 12.8 million bales last year. Due to insufficient demand from China, Indian cotton exports to China have been reduced by about 65% this year.
At the same time, cotton yarn exports to China are expected to continue to grow because Chinese cotton prices are almost 20 cents/lb higher than the international market prices. In addition, wages in China are growing. Therefore, China is now reducing spinning capacity and will focus on value-added products.
China not only imports cotton yarn from India but also imports cotton yarn from Indonesia and Pakistan.
The Cotton Advisory Committee set a cotton yarn export target of 920 million kilograms this fiscal year. In the last fiscal year, India exported 8.2768 billion kilograms of cotton yarn. The Indian General Administration of Foreign Trade reported that as of September this year, India had exported 4.6152 billion kilograms of cotton yarn.