Spun yarn exports from India were up two per cent in volume terms but down eight per cent in value terms in January 2016. The marginal increase in volume reflects the weakening global demand while the decline in value is explained by falling FOB price and depreciating the INR.
In January 2016, 85 countries imported spun yarn from India, with China accounting for 24 per cent of the total value with imports plunging 14.3 per cent in terms of volume YoY and declining 23 per cent in value YoY. Bangladesh, the second largest importer of spun yarns, accounted for 19 per cent of all spun yarn exported from India. However, export to Bangladesh jumped 54 per cent in volume and 36 per cent in value. Turkey, the third largest importer of Indian spun yarns, saw volume rising 26 per cent and value by 12 per cent. These three top importers together accounted for more than 48 per cent of all spun yarns exported in January.
While China started importing lesser yarn from India, Pakistan have been filling its yarn gap by increasing import from India. It has emerged to be the fourth largest market in recent months. Over the past three months, since yarn exports to Pakistan have increased from November, the export value to Pakistan have averaged 14 million US dollar during the three months ending January 2016. This was about 50 per cent more than the exports in the same period a year ago. Thanks to the drop in cotton harvest that has also pushed yarn prices up there. However, it is apparent that Pakistan has fulfilled its deficit and may not continue to import large volumes. A similar trend was visible in in 2013-14.
Meanwhile, Indian yarn exporters have apparently lost their price advantage to the lower end of the Chinese market due to falling cotton fiber and yarn prices there. As a result, Chinese textile spinners were more competitive and fabric makers were strongly resisting foreign offers. During the past three months (November to January), spun yarn export to China have declined sharply, averaging 90 million US dollar as against 140 million US dollar in the same period a year ago.
