Cotton yarn exports touch all-time high

In fact, exports are higher compared to the record achieved during 1997 514.47 million kg valued at Rs 6064.23 crore. EOUs have contributed around 49 per cent to the total exports. The EOUs in the country exported 262.29 million kg worth Rs 3122.43 crore.

However, in dollar terms there has been a fall of around 10.30 per cent in the total value of exports for the 1999 calendar to $ 1496.89 million compared to the previous record of $ 1668.75 million achieved in 1997. Value of cotton yarn exports for 1998 stood at $ 1422.75 million.

Here it may be noted the target set for cotton yarn exports from India for 1999-2000 financial year is $ 1500 million, scaled down from the 1998-’99 target of $ 1600 million. A lower target was fixed following last year’s currency crisis in some Asian markets which resulted in poor yarn offtake.

“Exports are doing well and we expect this to grow further. The huge idle capacity has once again started working,” Southern India Mills Association (Sima) Chairman M Ramaswami said here on Monday.

The most agonising part of India’s cotton yarn exports is the sharp drop in the average unit value realisation. Though Ramaswami was quick enough to dismiss the drop in unit value realisation as “expected following the fall in cotton prices globally”, the fact remains that Indian cotton yarn prices are fetching lower prices abroad. Industry circles claim wide disparity among prices of the commodity, for the same quality parameters, exported by different categories of exporters.

The average unit value realisation dropped from $ 3.24 a kg in 1997 (and $ 3.01 a kg in 1998) to $ 2.80 a kg during 1999 indicating a near 14 per cent fall.

Though this aspect has been disturbing, exporters feel movement of the commodity would help the spinning industry come out of woods. If one goes by Sima’s cotton yarn production projections for 1999, total exports of the commodity could be around 25 per cent of the production compared to 23.47 per cent production exported in 1998 and 22.83 per cent done in 1997.Sima has projected a production of 2142 million kg for 1999 (1607 million kg actual from January-September).

Exports of the commodity under the statutory ceiling for the calendar under review was only 154.63 million kg against the annual ceiling of 300 million kg for last year. It may be noted, the ministry had recently announced an increased ceiling of 500 million kg for this category – the 40s and below count for exports to non-quota countries.