Thanks to a surge in demand from foreign countries, cotton yarn producers in India and Pakistan were able substantially raising their prices since the start of October, latest data clearly show. .
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In Pakistan, cotton yarn exports sharply rose in October, according to provisional figures delivered by the Federal Bureau of Statistics. .
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Shipments of cotton yarns to foreign countries were up 14.26% in volume terms compared with the previous month while increasing by 13.23% and 13.71% in rupee terms and US$ terms, respectively. .
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From the same month last year, exports of cotton yarns rose 4.81% in volume terms while up 12.90% and 15.84% in rupee terms and US$ terms, respectively.In Pakistan such as in India, domestic cotton spinning industries were confronted with a sharp decline in exports in the past two years until cotton prices finally surged from the end of September. .
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The sudden rebound in exports is mainly due to higher demand from China. Confronted with cotton prices averaging 95 cents per pound at home, China spinners were forced dramatically raising their prices or reducing production. .
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As a consequence, China demand for cheaper cotton yarns from other Asian countries began surprisingly surging in the past weeks. .
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The rise in their exports helps Indian and Pakistani cotton spinners in absorbing the surge in their cotton costs. It also forces downward processors to accept the recent increase in domestic cotton yarn prices. .
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Cotton yarn prices were up about 12% in October on Karachi market with sharp differences depending on counts, according to the Pakistani industry association, the APTMA. .
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From October 2002, cotton yarn prices were up about 30% in rupee terms. Prices continued rising in November, in addition.Producers of value-added items are therefore confronted with the same choice facing Chinese spinners, raising their prices or reducing production. .
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As a consequence, Pakistani exports of textiles and apparel began sharply falling in October, down 12.43% from September in rupee terms (-12.05% in US$ terms). .
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Exports still rose 7.10% in rupee terms, compared with October 2002, however. Exports of cotton fabrics fell 16.34% in volume terms from the previous month, up 9.94% from the same month last year. .
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Producers of value-added products began asking Islamabad to impose a 10% tax on cotton exports in order to effectively limit the current level in cotton yarn prices.In India, domestic producers of cotton fabrics also protested against the recent rise in cotton yarn prices. .
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In charge of promoting cotton fabric exports, the PDEXCIL (Powerloom Development and Export Promotion Council) predicted difficult months ahead. .
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According to the association, prices of main yarn counts (from 20s to 60s) dramatically rose from the same period last year. .
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For example, prices of 30s yarns increased from 418 rupees per five kilos up to 550 rupees, a 31% growth. .
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In Bangladesh, downward processors also protested against the recent sharp rise in yarn prices, up about 25% in the past six weeks.In China, cotton yarn prices remained at very high levels in the past week although slightly declining on Qianqing market. .
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Average price of yarns of 32s fell to 23,000 yuan per ton (US$2.78 per kilo), down 4.17%. Prices were unchanged on the Southwest market.
Date:11/18/2003
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