Spun yarn export surged in September but could not recover previous fall

Spun yarn export shipment surged in September 2017, but was only a partial recovery from the significant fall posted in September 2016. Yarn export aggregated 112 million kg in September 2017, up 25% year on year and 26% in value at US$341 million. In September 2015, shipments had totaled 129 million kg worth US$359 million which fell to 90 million kgs or US$271 million in September 2016. Thus, exports in 2017 was still below the 2015 levels.

Unit value realization averaged US$3.04 per kg, down US cents 16 from previous month, but US cents 2 up compared to September 2016. Meanwhile the INR appreciated from INR66 in September 2016 to INR63 this year.

Cotton yarn export at 89 million kg worth US$280 million (INR1,765 crore) rose 26% and 27%, respectively in September. They found markets in 72 countries at an average unit price realization of US$3.13 a kg, US cents 18 less than previous month and US cents 4 up from the same month a year ago.

China increased its import of cotton yarn from India by 70% in value and 63% in volume, followed by Bangladesh and Egypt. During September, 12 countries did not import any cotton yarn from India as they did last year. However, they were replaced by 9 countries which imported yarn worth US$2.25 million.

Israel, Paraguay and South Africa were among the fastest growing large markets for cotton yarn.

100% man-made fibre yarns export was at 8.2 million kg in September, comprising 3.7 million kg of polyester yarn, 3.0 million kg of viscose yarn and 1.4 million kg of acrylic yarn. Polyester yarn exports jumped 42% in value while viscose yarn exports value moderated 5% during the month. Acrylic yarn exports were up 7% in September.

Polyester spun yarns were exported to 45 countries in September with average unit price realization at US$2.25 a kg, down US cents 12 from previous month. Turkey was the largest importer of polyester yarn, followed by Egypt and USA.

Viscose yarn worth US$9.5 million or INR60 crore was exported in September, at an average unit price realization of US$3.16 per kg. Brazil was the top importer worth US$1.75 million, followed by Belgium with imports worth US$2 million.

Blended spun yarns worth US$43 million were exported in September, up 27 per cent YoY in value terms. During the month, 8.4 million kg of PC yarns was exported worth US$22 million. Another 4.9 million kg of PV yarns were exported worth US$14 million.

Brazil and Turkey were the largest importers of PC yarn from India followed by Bangladesh while, Turkey was the largest importer of PV yarns from India followed by Iran.

According to official press release, total merchandise exports in September 2017 soared 26% in US$ terms valued at US$ 28,613 million while in INR terms, it was valued at INR1,844 billion registering a growth of 21% per cent. Among the top ten commodity groups that exhibited growth in September, ready-made garments increased 29% while cotton yarn/fabrics/made-ups/handloom products etc. increased 15%, from their respective levels a year ago.

The government was planning an incentive package entailing Rs 16,000 crore to revive exports amid economic slowdown and competition from other nations. Suresh Prabhu, the commerce minister, stated that a letter has been sent to Finance Minister to decide promptly on issues affecting export. The measures include allowing scrips (certificates) received under the Merchandise Exports from India Scheme (MEIS) to be used to pay Goods and Services Tax (GST), increasing incentive rates and interest subsidy for labour intensive sectors, reducing GST rate on MEIS/SEIS scrips, and infusing more capital in the Export Credit Guarantee Corporation of India (ECGC).