The Hindu Business Line : Cotton yarn exports begin to dip as made-ups make headway

COTTON yarn, which dominated textiles export basket for nearly a decade, is giving way to cotton made-ups, a higher value-added item ahead of yarn and fabric.

Thanks to the total quota phase-out from this year, several countries, which hitherto preferred to import India's yarn and convert it into fabrics/garment/made-ups, are now inclined to import cotton made-ups.

This has led the made-up sector to scale up their volume for exports this year, textile industry sources say.

In the $4-billion-plus textiles export basket at present, made-ups export constitute around 43 per cent ($1.7 billion), while cotton yarn and fabrics form the rest. This ratio may change drastically from this year and the share of the cotton made-ups is expected to surge to at least 60 per cent over the next 18 months when India's made-ups shipment is expected to touch the $2.2-billion mark.

The export projection for the cotton made-ups in a two-year timeframe is $3.8 billion, sources say.On the contrary, the yarn shipment appears to be losing steam in a seamless global textile trade. Though no official figures are available on the yarn shipped out in 2004 ( to see the existence of the quota and non-quota markets), the total volume of cotton yarn exported last year is reported to have slid to 340 million kg from the average 520 million kg registered during the immediate past four years.

The decelerated yarn export momentum in 2004 was noticed in the shipment made to the European Union destinations. India's yarn quota to EU was raised by 22 per cent last calendar year based on its earlier exports to the 10 new EU member countries.

Though India managed to record a six per cent increase in its shipments (50,000 tonnes) to EU, it could not fully use its yarn quota and its quota fill rate for yarn fell to 90 per cent. Yarn quota fulfilment in 2002 and 2003 for EU was 108 per cent and 104 per cent respectively.

The saving point for yarn shipment to EU last year, however, was that other Asian countries catering to the EU too performed badly.

While yarn shipment from Pakistan and Uzbekistan were down by 15 per cent, imports into EU from Indonesia and Thailand fell by 24 per cent. Exports from Russia were down by 45 per cent.

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Cotton yarn exports begin to dip as made-ups make headway