China's demand rebounded and Indian cotton yarn exports soared

Due to the resurgence of Chinese demand, India’s cotton Yarn export registration has jumped 55% in the first four months of the fiscal year. If this trend continues, this year's cotton yarn export may set a new record.

According to data compiled by the General Administration of Foreign Trade of India, from April to July 2013, traders and exporters have registered 48,815 million kg, compared with 31,419 million kg during the same period of last year. The cotton yarn export registration nearly doubled from 245.4 million kilograms in April-July 2012.

DK Nair, secretary-general of the Federation of Indian Textile Industry, said that if this trend continues, cotton yarn exports this year will exceed all previous expectations.

According to reports, the Cotton Yarn Advisory Committee anticipates that India’s cotton yarn exports will grow by 14.2% to 1.15 billion kilograms this fiscal year. However, actual exports may be higher. The total cotton yarn production this year is estimated at 4 billion kilograms.

Arun Sakseria, a cotton trader and exporter headquartered in Mumbai, said that the Chinese government’s cotton import tax and local taxes total about 40%. On the contrary, the import tax on cotton yarn is only 7-8%. Therefore, imported cotton is meaningless for Chinese textile mills.

China produces 6.7 million to 7 million tons of cotton each year, compared with 9.5 million tons. China formulates policies and gaps are compensated through zero-tariff imports, while increased imports are subject to high tariffs.