ICRA Predicts Sturdy Growth in Cotton Yarn Exports in India
Indian spinners, who were facing low demand during 2017-18 are now better off, following the upward swing in export demand for cotton yarn. Though the growth pace is expected to moderate this year, however, according to an ICRA report, India is set to record a strong growth in cotton yarn exports during this fiscal.
While the strong growth of 56% in cotton yarn exports during the four months of the current fiscal due to two-fold increase in exports to China is partly attributable to the low base effect, as exports were down by 56% in four months fiscal 2017-18, it has also been driven by competitive Indian cotton and yarn prices.
According to the recent report by the credit rating agency, fierce competition from Vietnam and China’s efforts to improve cotton availability are also likely to impact the export demand for India’s cotton yarn going forward.
The revival in export demand has enabled ICRA’s sample of large spinning companies report a comfortable volumetric growth of 5% YoY in the first quarter of this fiscal, which has translated into a growth of nearly 12 % in sales turnover during the quarter.
The increase in Indian cotton prices was comparatively at a slower pace than the international prices during the seven-month period ended May 2018, reporting a 6% increase in US dollar terms vis-a-vis a 20 % increase in the international cotton prices during the same phase.India News Region