India may see strong growth in cotton yarn exports in FY19: ICRA
The surge in export demand for cotton yarn over the past few months has come as a major respite for the domestic spinners, who had reported a multi-year low profitability during FY2018 amid multiple headwinds. Even though the pace of growth is likely to moderate during the year with the base effect setting in, India is set to record strong growth in cotton yarn exports during FY2019, according to an ICRA report released.
Commenting on the emerging trends, Mr. Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, ICRA, says, “Even though trends in domestic consumption of cotton yarn remain unencouraging, strong revival in export demand augurs well for profitability of domestic spinners as it has enabled them to pass on the increase in raw material costs, unlike last year. This together with access to low-cost cotton from the previous harvest season has helped the domestic spinners maintain the improvement trajectory in profitability in H1 Fy2019.”
Other factors apart, competitive pressures from Vietnam and China’s focus on improving cotton availability situation, are also expected to moderate the export demand for India’s cotton yarn going forward. Nevertheless, given the strong growth reported during four months of FY2019, cotton yarn exports for the full year are expected to report a healthy growth in FY2019.
Source :- Dailyshippingtimes.com