Cotton Yarn exports dip by 33% in Q1 to 226 mn kg

Cotton Yarn exports in the first quarter have fallen by 33 per cent to 226 million kg following decline in exports to leading export markets like China, Bangladesh, South Korea, industry body Texprocil Wednesday said. The exports April-June 2018 stood at 338 million kgs, Texprocil said in a statement.

"The cotton yarn sector is highly modernised and technology driven and also provides sustainable income to farmers. The steep fall in exports has been caused by a decline in exports to leading export markets like China, Bangladesh, South Korea and the duty free access given for import of cotton yarn by China to countries like Pakistan and Vietnam from April 1, 2019," Texprocil chairman K V Srinivasan said. Considering the large scale investment in the spinning sector and sluggish demand in the domestic markets, exports are the only avenue to ensure uninterrupted production and capacity utilisation, he added.

Srinivasan pointed out that even though cotton yarn is a value added product, it has been excluded from the export benefits like interest subvention, MEIS and the ROSCTL schemes. In view of the above Texprocil appealed to the government to include cotton yarn in the interest subvention scheme and also rebate the embedded taxes like agricultural cess, mandi tax, power and fuel surcharge, which incurred in the production process.

The ROSCTL scheme which rebates these levies should also be extended to the cotton yarn sector, he said. This will provide the much needed impetus in the context of rising cotton prices and appreciating rupee which are eroding competitiveness, he added..