Exports of cotton fail to pick, yarn lingers in December

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Cotton exportsdeclined in December with shipment of 1.4 million bales (170 kg each) as against 1.6 million bales exported a year ago in a situation where marketactivity was disrupted by demonetisation of high currency notes. The slowdown this year appears to have been played by rising prices in domestic market and lower than expected harvest due to pink pest attack in major cotton growing regions. Contracts are cancelled to take advantage of racing domestic prices in a period when prices do not tend to rise generally. Thus, the first three months of 2017-18 cotton marketing year, recorded shipment of 2.11 million bales as against 2.16 million bales in the corresponding months of previous year.

It also suggests that the cost of cancellation of contracts is much lower than the returns in selling in domestic market. The price realization averaged INR106 a kg or US cents 75.54 per pound in December as against the Cotlook Index ‘A’ averaging at 88.50 per pound and spot Shankar-6 at US cents 81.02 per pound for the month.  November had FOB values average US cents 90.68 per pound US cents 15 higher than local prices. The same reversed in December where FOB values were US cents 5 lower than local numbers.

Bangladesh, Vietnam and China were the largest importers of cotton with combined volumes at 1.13 million bales amongst the 21 countries that imported cotton from India in December. Shipment to Pakistan more than halved from 93 thousand bales last December to just 44 thousand bales this month.

New importers this December include Italy, Djibouti, Switzerland, Germany and Congo although small quantities were exported. No exports were done to these destinations in December 2016.

Among major cotton buyers, Taiwan, Turkey and Singapore substantially reduced their import this December while a dramatic spurt was seen in shipment to Mauritius.

Cotton yarn exports linger, polyester yarn surges

Spun yarn including cotton yarn exports edged down in December, but higher price realization pegged values in US$ term up 4.4%. Export totaled 126 million kg during the month, down 1.4% year on year worth US$375 million. Unit value realization averaged US$2.96 per kgup US cents 2 from previous month, and US cents 17up compared to last year. Meanwhile the INR appreciated from INR67 to INR64 this year. Yarn exports to the largest buyer, China declined 20% both in terms of volume and value during December. It still accounted for 32% of all yarn shipped during the month. A year ago, the share was close to 37%.

Cotton yarn export at 104 million kg worth US$312million (INR1,990 crore) was down 3.5% in November as 75 countries imported yarn at an average unit price realization of US$3.01a kg, US cents 3more than previous month and US cents 16 higher than last year

China continued to cut its import of cotton yarn from India by 4% in November and further by 18% in December in value terms, but still accounted for 35% of total shipment during December followed by Bangladesh and Pakistan.16 countries did not import any cotton yarn from India as they did last December. They were replaced by 11other countries which imported yarn worth US$1.75million.

Kenya, Syria, Czech Republic, Vietnam and Italy were among the fastest growing large markets for cotton yarn in December while Indonesia, USA and Brazil reduced their import significantly compared to last year.

100% man-made fibre yarns export also moderated in volume but higher price realisation more than compensated the loss in December.MMF yarnscomprised 4.2million kg of polyester yarn, 1.7 million kg of viscose yarn and 1.6 million kg of acrylic yarn. Polyester yarn exports jumped 23% in value while viscose yarn exports value declined 11% during the month. Acrylic yarn exports inched up 1.5% while volumes jumped 13% at lower price realization.

Polyester spun yarns were exported to 49 countries at average unit price realization of US$2.39 a kg. Turkey remained the largest importer of polyester yarn, followed by Brazil and USA.

Source: Fibre to Yarn Export Statistics – India report of December 2017



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