Using imported carded cotton yarns instead of spinning the lower grade domestic cotton or to import international low grades, is turning to be economical beneficial for several Chinese textile mills.
Fixing of the minimum cotton import price seems to have impacted the economics of importing low grades, as one of the many reasons offered.
Indian low count carded yarns proves very economical for these mills. This is proved by the January through August carded cotton yarn import volume, which reached 111,800 tons showing year-on-year 25 percent growth.
In the coming 12 months, the volume of carded cotton yarn imports is likely to boost cheaper imports and accelerate further.
Meanwhile, in the coming months, cotton yarn from India is anticipated to enter Chinese markets at substantial discounts against domestically produced yarns.
Indian cotton yarns of 20 count are available for Rs 82 per kilogram, or about US 83 cents per pound, while similar 20 100-percent Chinese cotton yarn in domestic market is priced at an average of Yuan 18,117 per ton, or roughly US 101.52 cents per pound. Note, freight and VAT if not accounted for, will further drag down the price.
