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India's Yarn Exports Grew By 70% Over The Same Period Last Year.

2011/9/23 11:15:00 46

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Although the time is short, the textile industry in India shows obvious signs of recovery, and cotton yarn exports surged by 70% in August.

Textile Commissioner of India textile department reports yarn

Exporter

The interest was restored to 97 million 700 thousand kilograms in August, compared with 57 million 200 thousand kilograms in July.

The feedback from yarn exporters is encouraging, purely because of two factors.

Premal Udani, chairman of the garment export promotion committee, said that first, the government restored the tax refund authority bankbook (DEPB) plan until September 30th.

Last year, the DEPB plan was cancelled in the middle of yarn export.

The DEPB plan is restored to allow exporters to return to orbit.

Second, the rupee depreciates.

In the first 4 months of this financial year, the response of yarn exporters is depressing.

Spin

Commissioner A B Joshi said the overall yarn outlet was very poor.

As a result, yarn manufacturers reduce production and reduce stock in circulation channels.

As the global economy slows down, especially in Europe and the United States, global buyers are abandoning new purchases.

Last year, the government restricted the export of cotton yarn to 720 million kilograms.

Exporter

The export time is less than 8 months.

In the remaining 4 months, there was almost no export, resulting in an oversupply in the domestic market.

Although the government has liberalized exports since April, demand has been low because of the uncertainty of the global economy.

Udani said that in order to maintain profitability, the spinning industry began to hedge extensively against the US dollar.

The revival of foreign market demand is a good omen for the industry as a whole.

By the end of November, we will be able to see whether the recovery will continue.

Many export oriented industries face many problems, especially the textile industry.

Harshad Bhayani, chairman of the India exporter's forum, urged the Ministry of Commerce to extend the DEPB plan, giving exporters a breathing space before introducing the goods and services tax.

The exporter preferred the DEPB plan, which ends in September 30th.

Another problem facing the textile industry in the first quarter is interest rate rises. In recent months, banks have raised interest rates from 7% to 12.5%.

According to DK Nair, President of the India Textile Industry Federation, in the past 10 years, the spinning mill has invested 400 billion rupees for capacity building and modernization, which means that they will repay about 50 billion rupees each year to the bank.

These loans require an interest of 20 billion rupees.

So this year, the spinning factory must pay 70 billion rupees to the bank.

Other sectors of the value chain also have huge repayment commitments.

The rise in interest meant that their repayment amount increased, thereby weakening the financial situation of the textile factories.

The highly leveraged capital structure, coupled with rising interest rates, will face a higher default risk in the textile industry.

At the end of last year, the highest price of 62 rupees / kg was set. The price of the benchmark Carle - 6 cotton varieties fell to 32 rupees / kg in the beginning of the fiscal year.

The price of this variety is now stable at 39-40 rupees / kg.

As a result, fiber price increases are gradually shifting to yarn.

As a result, the price of cotton yarn has started to recover. At present, the price of 30S yarn is 180 rupees / kg, compared with 140-150 rupees / kg in early June.

However, the industry feels that the outlook for cotton and textile industry is still tense because DEPB plans to end in September 30th.