US ban on China cotton hurting India’s yarn spinning industry

The US ban on textiles originating from the Xinjiang province of China has compounded the issues for India’s cotton yarn spinning industry, with half of the mills changing into idle up to now 4 to 5 months.

The Chinese yarn that may’t go to the US is now discovering its method into the Indian market at cheaper charges, additional lowering demand for costly domestic Indian cotton yarn that has already been down. Indian cotton has been one of many least expensive on the planet until September 2021, when Indian in addition to international cotton costs began rising.

In September 2021, costs had been round ₹51,000 a sweet (of 356 kg). Then it reached round ₹1.1 lakh by April this 12 months. Throughout these seven months, the tempo of enhance of Indian cotton costs was a lot sooner than that of world cotton, which made Indian yarn uncompetitive.


“We used to export 110-120 million kgs of yarn a month, which got here right down to 40-45 million kgs a month from June resulting from excessive cotton costs. Final month, we imported 4,000 containers of cotton yarn from China, which is round 80 million kgs,” mentioned an government of a textile firm from North India.

India imported $568 million of cotton and cotton merchandise in April-July 2022, greater than double the $259 million imports a 12 months earlier. The import of those merchandise from China was $46.6 million.

The home trade has been affected adversely.

Lalit Mahajan, senior vice chairman at Welspun India, mentioned: “Many of the mills have both shut down their spindles or have gone for making substitute fibres like viscose, polyester, and many others. Our (India’s) yarn exports in August fell to lower than one-third of the conventional month-to-month yarn exports. The export orders for Indian yarn, textile, clothes, and many others., are very low, whereas the Indian home cotton and yarn costs are nonetheless larger by 23% than the New York futures costs,” he mentioned.

The trade government from North India mentioned: “If the cheaper Chinese language yarn is coming to India, it’s going to be a giant downside for Indian spinners. Chinese language cotton and yarn have all the time been costlier by 10-25% than Indian cotton. Usually, no import of cotton yarn used to happen from China.”

Atul Ganatra, president of the Cotton Affiliation of India mentioned about 50% of the spindles had turn out to be idle. “The whole spinning trade is depressed as a result of unprecedented value fluctuations in cotton that we noticed in 2021-22. Exports have fallen by 70%,” Ganatra mentioned.

Indian yarn exported to China and Bangladesh will get transformed into material and clothes after which will get exported to Europe and the US. A fall in garment imports by Europe and the US resulting from recessionary pressures, in flip, has already minimize the demand for Indian yarn from China and Bangladesh. The impression as a result of US ban on materials from Xinjiang has added to that.

“Indian cotton yarn was all the time aggressive on the planet. Now, Chinese language cotton yarn has began coming into India as a result of points associated to Xinjiang province, hypothesis on cotton costs within the Indian market and a delay within the elimination of import responsibility on cotton,” mentioned Okay Selvaraju, secretary normal of the South Indian Mills Association.

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