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Market watch: Chinese cotton yarn exports to India may be promising

2022/10/10

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According to the relevant Indian authorities, the number of cotton yarns imported by India from China from April to June 2022, the import value skyrocketed (from 13,399 kg and US$14,982 in April to 15,962 kg and US$754,000 in June). Except for sewing thread, all other specifications of cotton yarn showed several times increase.
 
From the feedback of some Indian cloth mills and traders, the growth of import demand for Chinese cotton yarn in July and August is still relatively strong, especially medium and high count cotton yarn by Indian companies' attention, favor. Customs data show that in July and August 2022 China exported 25,500 tons of cotton yarn, 20,600 tons, an increase of 0.71%, -17.75% respectively, but cotton yarn exports to India continued to grow more substantially, some domestic cotton mills and traders through a variety of channels, hoping to open, expand exports to Indian enterprises. But overall, the current Chinese cotton yarn exports to India is still in its infancy, the impact on India's domestic cotton yarn supply, price is not much, has not yet attracted the attention of government departments, Indian industry associations, etc..
cotton yarn
Chinese cotton yarn exports to India ring exponential growth mainly in the following points.
 
1. by the Indian domestic 2021/22 cotton prices "high can not win" and other energy, transport and other factors, the impact of the second quarter of 2022, the South India region yarn mill reduction shutdown ratio of more than 50%, while the northern Gujarat state has nearly 90% of the factory closed down, so the supply of cotton yarn is insufficient.
 
2. Indian end-users have recently received more orders for Christmas 2022 in Europe and the US, stealing the thunder from China. Data shows that the total amount of Christmas products shipped from India to the US in August 2022 was about US$20 million, an increase of about three times compared to the same period last year.
 
3. Chinese cotton yarn compared to Indian yarn quality and low price, outstanding cost performance, especially 50S and above count cotton yarn (including combed). Indian traders feedback, the current price of imported Chinese cotton yarn is about 20% lower than the domestic price in India (India cotton yarn imports have 18% of the basic tariff and other taxes), and CV value, hairiness, strength, stability and other quality indicators are more competitive.
 
4. India itself and Southeast Asia, South Asia countries have a certain consumption capacity for cotton textiles / clothing, etc., and there are exports to non-US and EU markets. Several import and export companies in Jiangsu, Zhejiang and Guangdong said that the current proportion of Indian orders requiring traceability is very low, and the contract price is the focus of negotiation.

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