India’s yarn exports expected to surge as fabric exports remain stable

The boost provided by the US-China trade war to India’s cotton exports in marketing year (MY) 2019-20 was offset by the spread of pandemic. However, the country was able to control the pandemic’s impact through lockdowns and vaccination, reports SRTEPC. This also boosted area under cotton cultivation by 5.56 per cent to 13.30 hectare and production by 14.34 per cent to 29.50 million 480-lb bales in MY 2019-20.

Increase in cotton production to boost prices

India’s area under cotton cultivation is expected to reach 13.40 hectare while production is expected to increase to 29.50 million 480-lb bales in the year. Cotton exports are expected to increase 42.86 per cent in the MY 2020-21 to 500 million 480-lb bales while imports are expected to decline by 56.14 per cent to 1.00 million 480-lb bales.

Prices of Indian cotton fibers have been growing considerably since January 2021. For example, price of DCH-32 from Karnataka and V-797 from Gujarat increased 20.14 per cent and 22.87 per cent to Rs 71.23/candy and Rs 33.89 candy in March 2021 up from Rs 59.29/candy and Rs 27.58 /candy in January 2021, respectively. Price of other cotton varieties such as J-34-RG from Bhatinda, MCU-5 from Andhra Pradesh, MECH from Maharashtra, Mech-I/H-4 from Madhya Pradesh and Shankar-6 from Gujarat have also increased by 4to 7 per cent.

Growing demand for value added cotton textiles

There is increased demand for value added cotton textiles since the beginning of MY 2020-21. Most demand is being generated from countries like China, Bangladesh, and Vietnam. In the first half of MY2020-21 India’s monthly average yarn exports surged 15.67 per cent to 89.64 thousand metric ton and is further expected to increase 6.64 per cent from January to July 2021.

Meanwhile, fabric exports are expected to remain stable at a slightly lower value from January to July 2021. In the first half MY 2020-21, fabric exports surged 36.61 per cent to 169.52 thousand metric tonne from the monthly average exports of 124.10 thousand metric tonne in the MY 2019-20.