Textile Market Feature

India has been losing ground and share in China’s cotton yarn market. Latest statistics suggests, China has slipped to fourth position in Indian cotton yarn export market in April. The latest import and export data reveals, the total export volume of Indian cotton yarn (HS code 5205) in April 2024 was 87,637.26 tons, a year-on-year increase of 14.54 per cent, but a month-on-month decrease of 16.25 per cent. China meanwhile has slipped to the fourth position in the Indian cotton yarn export market, with the export volume to China in April being 4,808.07 tons, a decrease of 51.36 per cent year-on-year and 59.72 per cent month-on-month. The significant decline in Indian cotton yarn exports to China can be attributed to numerous factors.

As the Indian textile industry awaits the Union Budget on July 23rd, 2024, a chorus of demands is rising from various stakeholders, particularly for the critical spinning sector. Industry leaders are urging the government to implement supportive measures to address raw material access, competitiveness, and technological advancements. Stakeholders like RK Vij of the Textile Association of India and S K Sundararaman of Southern India Mills' Association emphasize the need for readily available cotton, polyester, and viscose at globally competitive prices. Sundararaman proposes government intervention to ensure Indian mills access high-quality cotton at 10 per cent lower prices than the international market. Additionally, Sanjay Garg of Northern India Textile Mills' Association and Jaikrishna Pathak of the Bombay Yarn Merchants Association and Exchange advocate for removing import duties on cotton to facilitate easier access to global supplies.

Cotton, a natural fiber synonymous with comfort and versatility, remains a vital player in the textile industry. But who are the biggest players when it comes to consumption? China, India, and Pakistan reign supreme, historically with around 60 per cent share of the world's cotton. China remains the undisputed king of cotton consumption, with around 30-35 per cent of global demand. This dominance stems from its massive population and a booming textile industry. However, there are signs of a changing landscape. China's cotton consumption has seen a slight decline in recent years, possibly due to factors like rising labor costs and a focus on higher-value garments that use less cotton. India, with its own large population and growing apparel sector, follows closely behind, consuming roughly 20-30 per cent of the world's cotton. India’s consumption has been steadily rising, driven by a booming textile industry and a growing domestic market.

The Indian yarn export market has witnessed a significant turnaround in the last six months (January-June 2024), driven by a surge in demand from key destinations like Bangladesh and China. Industry reports indicate an overall growth of about 83 per cent in cotton yarn exports compared to the same period in the previous fiscal year (FY23). Cotton yarn exports rose by an impressive 83 per cent in FY 24 compared to the previous year. Notably, China's share of Indian yarn imports has more than doubled in FY 24, reaching 21 per cent from just 10 per cent in FY 23. This is attributed to concerns about forced labor in China's Xinjiang cotton production, leading global apparel brands to seek alternative sources. While Bangladesh continues to be the largest importer of Indian yarn by value, China has made a surprising comeback. Bangladesh maintained its position as the top importer, accounting for roughly 28 per cent of India's total cotton yarn exports. Stable demand from Bangladesh's garment industry continues to fuel this growth. As per ICRA a 25 per cent decrease in cotton fiber prices compared to FY 23 makes Indian yarn more competitive.

A report by Earthsight, a UK-based environmental NGO, accuses major clothing brands H&M and Zara of using ‘tainted cotton’ in their products. This cotton is linked to illegal deforestation, land grabbing, and violence in Brazil's Cerrado savanna. The illegal activities have severely impacted indigenous communities who rely on the Cerrado for their survival.

As cotton growers in India celebrate the rise in the Minimum Support Price (MSP) for cotton for the 2024-25 marketing season. This move, aimed at ensuring remunerative prices to growers, has sent ripples through the entire cotton industry, raising questions about its impact across the supply chain.

China's cotton yarn imports witnessed a significant decline in April 2024, raising concerns about the global cotton yarn trade and its impact on key players like India.

China's cotton industry is changing, with technology playing a leading role. Mechanization has grown from 21 per cent in 2014 to a remarkable 94 per cent today.

India, with the largest area dedicated to cotton cultivation globally, should be a textile titan. As per estimates India has the the world's largest cotton acreage, estimated at over 25 per cent. Yet, this dominance does not reflect in cotton production with a meagre 8 per cent share of global cotton production.

India's man-made fiber (MMF) exports witnessed a decline of 15.3 per cent in 2022-23 compared to the previous year, reaching $5.78 billion. This comes despite the industry's ambitious target of reaching $11.4 billion by 2030.

The fashion industry is undergoing a transformation, driven by a material reborn from plastic waste: recycled polyester fiber (rPET). This eco-friendly alternative to virgin polyester is rapidly gaining traction, fueled by a booming market and growing consumer demand for sustainable products.

The European Union's Ecodesign for Sustainable Products Regulation (ESPR), to be implemented soon, is sending shockwaves through the global fibre and yarn industry. With a focus on promoting circularity and reducing environmental impact, the ESPR will significantly alter the production, trade, and consumption of these materials.

India, a global textile powerhouse, is increasingly embracing recycled cotton fiber as a sustainable alternative to virgin cotton.

Xinjiang's cotton industry has defied US sanctions with a record increase in exports, thanks to a ‘revolutionary shift’ in textile mill technology.

Bangladesh, the world's second-largest garment exporter, is witnessing a huge demand for polyester fibers and yarns. This trend presents a significant opportunity for India, a leading producer of these synthetic textiles.

The traditional peak season of 2024 witnessed a surprising reversal of fortunes in the nylon filament yarn (NFY) market.

H&M is making a major shift in its sustainability efforts, moving away from recycled plastic bottles for polyester and towards a more circular solution: recycling old clothes.

The U.S. Department of Agriculture's (USDA) May 2024 World Agricultural Supply and Demand Estimates (WASDE) report offers a positive outlook for the cotton industry, projecting a rebound in global production for the upcoming 2024/25 season.

India is set to revive its cotton sector with a brand new five-year Cotton Technology Mission, aiming to reclaim its position as a leading textile producer and reduce reliance on imports.