By Nayan Dave
For the primary time within the historical past of the nation’s textile business, India is witnessing import of cotton yarn to make sure seamless provide of the vital raw-material to weavers and textile mills. The imported cotton yarn is almost Rs 30 (per kg) cheaper than the yarn being offered by native spinners.
Speaking to FE, Atul Ganatra, president, Cotton Association of India, claimed, “Although India has imported cotton many times in the past, this is the first time that cotton yarn traders and brokers have decided to import cotton yarn. This is unprecedented.”
“Nearly 200 containers (4,000 tonnes) of 40 counts of combed-carded compact cotton yarn have arrived at Indian ports from Vietnam, Indonesia and Taiwan,” Ganatra stated.
Not solely that, a few of the weavers and textile mills within the nation have bought imported cotton yarn from merchants in smaller portions for testing functions and in the event that they finnd it appropriate they’re seemingly to provide greater orders for the imported cotton yarn.
After China, India has the world’s second largest spinning capability. The nation is producing 4.7 mt of spun yarn of which 3.4 mt is cotton yarn. According to the CAI president, weavers and textile mills devour almost 60 to 65% of the whole cotton yarn being produced in home spinning mills and the remaining is exported.
“Considering the huge installed capacity of spinning units in the country, Indian weavers never had to import cotton yarn in the past. However, for the first time they are forced to buy imported cotton yarn this year as it is nearly Rs 30 (per kg) cheaper than the yarn being sold by the local spinners,” he stated. Unlike cotton, the Government of India (GoI) has not eliminated import obligation on cotton yarn. However, there isn’t any import obligation on cotton yarn being imported from Vietnam and therefore importers are profiting from this.
Prices of cotton within the home market are a lot larger than worldwide costs and therefore manufacturing price of spinning items in India stays excessive, stated Jayesh Patel, government committee member of Confederation of Indian Textile Industry (CITI). Patel claimed that the spinning business in India is presently working at half of its put in capability as a consequence of decrease demand. In the wake of import of cotton yarn, spinning items throughout the nation can have extra challenges to promote their finish merchandise, he added.
Bigger corporations like Welspun have already began importing cotton. “We have a huge installed capacity to make cotton yarn and hence the Welspun group is importing cotton from Egypt. Despite imports of cotton, we are able to make cheaper yarns for our weaving units,” stated Chintan Thaker, president, Welspun Group.
Similarly, Ahmedabad-based Chiripal Group firm Nandan Terry has determined to import 100 mt of cotton from Nigeria. Ronak Chiripal, CEO of the corporate, stated, “Rising cotton costs have elevated the volatility within the enterprise projections with respect to income as margins have come beneath stress. We had anticipated this risk and brought precautionary measures like cotton hedging. We haven’t reduce down on manufacturing and are working at full capability.
”Except greater spinning items which have bought cotton at comparatively decrease price, a lot of the spinning items are struggling to proceed operations,” stated Gautam Dhamsania, proprietor of Rajkot-based Narmada Spinning, including, “There is a dearth of quality cotton in the domestic market. Most of the spinners will have to wait till fresh arrival of cotton from October this year.” Cotton inventory of textile mills is exhausting quick and therefore there can be additional import of cotton yarn for subsequent 3-4 months which may take the tally of imported cotton yarn as much as almost 1,000 containers. Simultaneously, composite textile items like Welspun would proceed importing uncooked cotton until the contemporary arrival of cotton within the home market.
Source: www.financialexpress.com”