Why did India’s cotton yarn imports drop sharply in May?

According to customs statistics, in May 2023, my country’s cotton yarn imports totaled 128,900 tons, an increase of 7.16% month-on-month and a year-on-year decrease of 1.48%.…

According to customs statistics, in May 2023, my country’s cotton yarn imports totaled 128,900 tons, an increase of 7.16% month-on-month and a year-on-year decrease of 1.48%. Among them, Vietnam’s cotton yarn imports were 64,500 tons, accounting for 49.99%, firmly occupying the first place, while India’s cotton yarn imports were only 16,900 tons, accounting for 13.12%, falling to third place (a month-on-month decrease of 9.20% , a year-on-year increase of 183.84%); Pakistan’s cotton yarn import volume was 21,600 tons, accounting for 16.79%, once again surpassing Indian cotton yarn, regaining the second place (a month-on-month increase of 48.80%, a year-on-year increase of 75.38%), and Uzbekistan’s cotton yarn import volume ranked fourth (07,100 tons), the gap with the top three is quite obvious.

Some cotton yarn trading companies and weaving factories said that due to the record high volume of Vietnamese yarn arriving at China’s main port in May, and the impact of the Xinjiang cotton import ban by the United States/European Union and other countries, a certain proportion of export orders were transferred to Southeast Asian branches such as Vietnam. Or OEM production, but the local weaving, printing and dyeing capabilities and levels are still insufficient, so the phenomenon of cotton yarn “returning” to the country is relatively common, so the proportion of Vietnamese yarn imports is expected to continue to rise.

Judging from the feedback from traders in the light textile market in Jiangsu, Zhejiang, Guangdong and other places in May, Indian yarn has a slightly higher cost performance and the quantity of bonded and customs clearance at ports is significantly higher than that of cotton yarn produced in Pakistan/Uzbekistan and other places. Comparison of cloth factory inquiries/viewing goods Positive, but the actual import volume was lower than that of Pakistani cotton yarn. Then Pakistan yarn counterattacked and exceeded expectations.

A large textile import and export company in Hangzhou said that the sharp drop in Indian cotton yarn imports in May may be related to the following three factors:

First, since May, the operating rate of weaving enterprises in coastal areas such as Guangdong, Jiangsu and Zhejiang has continued to fall (even to 20-30% in Foshan). In particular, the demand for medium and high-count knitting yarn has decreased significantly. Indian cotton yarn 40S and above has been more affected than other countries. The origin is relatively large (especially high-count combed yarn and high-quality packaged bleached yarn).

Second, although the domestic cotton price in Pakistan stabilized at a high level in May, under the premise that a small amount of new cotton is on the market and the cotton planting area in 2023 reaches or even exceeds the government target, all parties are increasingly expecting the cotton price to fall. Some cotton yarn FOB/CNF The quotations were the first to fall back, stimulating Chinese buyers to place orders.

Third, the proportion of cotton yarn trade between China and Pakistan directly settled in RMB has increased rapidly, which has effectively circumvented Pakistan’s serious shortage of foreign exchange reserves and restricted the development of letter of credit business. In addition, the RMB settlement of trade between China and Pakistan not only significantly reduces trade transaction costs, but also reduces exchange rate risks to a relatively low level.

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Author: clsrich