* China to cut cotton imports, to focus on manmade fibres
* Traders apprehend curbs on yarn exports from India
By Deepak Sharma
MUMBAI, Dec 10 India's exports of cotton yarn
are expected to rise a fifth in the fiscal year to next March,
spurred by higher imports by top consumer China and a weaker
rupee currency, traders said on Monday.
Exports of yarn, a value-added product used by textile
mills, are expected to touch 992 million kg in the fiscal year
ending next March.
But overseas sales of raw cotton are likely to fall to 7
million bales (of 170 kg each), down 45.7 percent on the year
ending on Sept. 30 2013, they said.
China, India's biggest buyer of cotton in the marketing year
to Sept. 30, when New Delhi shipped out a record 12.9 million
bales, is gradually shifting to man-made fibres such as
By doing this China aims to avoid supply disruptions from
cotton manufacturers such as India, which often reins in exports
to avert shortages at home, said Sushil Agrawal, who owns a
large yarn manufacturing unit in the northern state of Haryana.
In October, raw cotton shipments from India to China fell by
98 percent, while yarn export registration jumped more than 100
percent to about 9.4 million kg, government data showed.
"Cotton yarn export registrations rose by over 20 percent so
far in the current fiscal (year) and we expect this trend to
continue until March. And yarn shipments could go up by at least
20 percent this fiscal," said the chief financial officer of a
Mumbai-based textile firm, who did not want to be identified
because he is not authorised to speak to the media.
Cheap labour, surplus cotton and a fall in the rupee have
made it attractive for India to ship more yarn, said D. K. Nair,
secretary of the Confederation of Indian Textile Industry
On Friday, the rupee fell 11.6 percent against the dollar to
end at 54.47 rupees, from its Feb. 6 level of 48.16 rupees.
Annual yarn manufacturing capacity in India, Asia's
third-largest economy, is around 3.6 billion kg.
The state-run Cotton Advisory Board (CAB) estimates there
will be exportable surplus of 920 million kg, or 20 to 22
percent of total output, in the fiscal year that ends in March
2013. Traders and millers expect yarn exports to touch 992
But some traders fear the government could curb yarn exports
if a sharp rise in shipments results in any shortage.
"We have asked the government not to intervene and let the
market forces decide on the direction of cotton and yarn
exports," said Nair of CITI.
Currently traders are shipping yarn at $4 per kg, free-on-
board, higher than $3 per kg, a year earlier.
Aggressive local purchases for export have lent some support
to domestic cotton prices, preventing them from falling sharply
despite rising supplies from the new season crop.
Also, demand for raw cotton has been lukewarm on lower
global cotton prices. Benchmark New York prices have
fallen around 25 percent from the year high reached on Jan.23.
By 0952 GMT, the contract was trading up marginally, at
73.82 cents per lb.
(Editing by Mayank Bhardwaj and Clarence Fernandez)