As currently, the Chinese cotton is selling at an auction in China at prices 25% higher than the Indian domestic cotton fibre rate, so Indian cotton yarn exports may raise. In the current fiscal overall, the cotton export has been down but the demand from Bangladesh has been strong as the Chinese demand has been low.
During April-December 2016 by 12% Indian cotton yarn export fell down and reached to 872.19 million kg from 987.21 million kg in the same period of the previous year. The cotton export of India had seen a small rise of 4.29% in the financial year 2015-16 and reached to 1307.11 million kg from 1253.33 million kg in the last fiscal.
The cotton was priced between Rs. 51,000 and Rs. 56,000 per candy (one candy=356 kg) on the very first day of Chinese auction whereas in Indian markets it is being sold for Rs. 42,000. Than the Indian cotton Chinese cotton is hence high-priced. After a period of two to ¬three years as the fibre, colour turns to yellow the cotton that is been put in auction in China is around seven-year-old and natural cotton starts degenerating.
Even after all these Chinese spinning mills are still buying cotton and will mostly use it in a blend of fresh cotton. By China India exporters although is charged 3.5% duty on import but still the difference is price will be a plus point. As the exporters of the country are charged zero duty in China the only competition India will have to face is Vietnam.
From India, Chinese textiles mills would eventually purchase cotton yarn which gives hope to the cotton exporters. The price has increased by 5-7% in last few weeks and within the country also the local mill’s yarn demand has also revived. The yarn price follows with a difference of 12 months as the cotton price increases.
On March 7 the Shankar 6 variety has reached Rs 12,188 per quintal and the prices of cotton have increased in this year. By over 10 % this year Cotton (Shankar 6) has a price rise. At 79 $¬cents per pound, the price of cotton is in the International market which are the highest ever.
The Indian cotton yarn output to will fall to 3,936 million kgs according to a report which has forecasted for the financial year 2016-¬17 because of a low demand due to lower demand from China. At a competitive rate, the MMF (man-made fibre) was also available easily.
In cotton yarn production A fall of 10% was seen in 2011-¬12 but in 2012¬-13 it rose to 3,583 million kgs and to 3,928 million kgs in 2013-¬14.