Exports of cotton yarn to China from both India and Pakistan have skyrocketed in the current year. In the process, China has now started importing cotton yarn in huge quantities instead of raw cotton that it used to import in the last 18 months.
According to the data from Chinese customs, China totally imported 1.08 million tons of cotton yarn in the first 9 months of 2012, up a massive 74.17 percent or 462,800 tons over the same period last year.
In the first five months of 2012, cotton yarn imports from Pakistan increased by a massive 82.55 percent year on year, from India it skyrocketed by a staggering 166.14 percent and from Vietnam and Uzbekistan, they jumped 73.63 percent and 68.83 percent, respectively.
Most of the experts fibre2fashion spoke to, attributed the hike in Chinese yarn imports in 2012, to the unprecedented rise in labour and other costs and also due to the decision of the Chinese textile sector to concentrate on value-addition from yarn stage.
Mr DK Nair, Secretary General of the Confederation of Indian Textile Industry (CITI) says, "Spinning is becoming less competitive in China because of rapid increase in wages and other costs of production. Their industry is currently trying to climb up the value chain and in the process is reducing its presence in spinning".
Mr Vikas Ladia – Managing Director of Rajasthan Syntex Ltd shares the same opinion of Mr DK Nair. However he is also of the opinion that alternative employment apart from textiles is now available which has brought in a big shortage of workers in the textile sector in China.
Mr Govind Sharda – Executive Director of Maharaja Shree Umaid Mills Ltd (MSUM) while sharing the same opinion as Mr Nair and Mr Ladia on rising labour and electricity costs, added a different perspective.
"During the time when cotton prices were very volatile, a lot of spinners shifted to synthetics from cotton. And since this time the winter is expected to be harsh, they will stay put with synthetics, paving a way for a rise in cotton yarn imports, he said.
"Secondly, the Chinese textile sector now prefers to add value from the yarn stage, as spinning is a labour as well as energy intensive process. And, since Indian cotton yarn is available at a very competitive price in India, Chinese cotton fabric producers prefer to import, hence the steep hike in yarn exports from India", he added.
Revealing the opportunities that lay ahead from this development for India, Mr Nair informs, "India has the second largest and one of the most efficient spinning industries in the world. Naturally, China is expected to import Indian yarns increasingly in the coming months and years".
Mr Ladia adds, "We need to keep our costs under control as this presents a huge opportunity for Indian spinners, considering that we have access to good quality cotton".
