According to statistics, India exported 35,400 tons of cotton yarn in July 2022, a month-on-month decrease of 7.33% and a year-on-year decrease of 69.24%, continuing the “double decrease” momentum of June’s month-on-month decrease of 19.07% and a year-on-year decrease of 67.85%.
In the 2021/22 fiscal year (August-July), India exported 1.0735 million tons of cotton yarn, a year-on-year decrease of 5.19%. Among them, 460,700 tons were exported to Bangladesh, a year-on-year increase of 44.90%, accounting for 42.92%; 144,000 tons were exported to China, a year-on-year decrease of 50.47%, accounting for 13.42%.
Why did India’s cotton yarn exports fall by nearly 70% year-on-year again in July? According to industry analysis, in addition to the continuous sharp decline in contracts and purchases of Indian cotton yarn in the Chinese market since 2022, Bangladesh’s steep decline in imports of Indian cotton yarn has seriously hurt Indian yarn mills and exporters.
On the one hand, affected by the Federal Reserve’s continued aggressive interest rate hikes, rising risks of global economic recession and rising energy prices, sales progress of large European and American retailers and fast-moving clothing manufacturers has slowed down, and inventory pressure has increased. Since June 2022, Bangladeshi companies have Overseas orders have dropped significantly; on the other hand, due to the ongoing Russia-Ukraine war, European and American sanctions and counter-sanctions against Russia, the regional energy crisis has also weakened the delivery capacity of Bangladesh’s garment industry (energy supply is the key to timely delivery of products). In the near future, Bangladesh must not Without taking some measures to reduce load and restrict electricity production to save electricity, the ability of textile and clothing enterprises to receive, arrange and deliver orders has declined significantly.
In addition, the domestic cotton price in India is oscillating at a high level, and there is little room for downward adjustment of FOB/CNF quotations of yarn mills. Bangladeshi textile and clothing companies receive meager profits or even losses when receiving export orders from Europe and the United States. They can only pick orders and reject orders, thus affecting the consumer demand for Indian cotton yarn. With the continuous decline, Indian yarn mills and exporters “shot themselves in the foot.”
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