China’s cotton yarn import is increasing in 2021. According to GACC data, the country imported 168,700 tonnes of cotton yarn in May ’21 – noting a year-on-year (Y-o-Y) increase of 66.24 per cent.
Cumulatively, from January to May 2021, the import of cotton yarn was 975,200 tonnes that’s a Y-o-Y increase of 35.82 per cent.
The increase in cotton yarn import can be attributed to reviving production and sales of cotton textiles and garments in China.
However, as per cotton yarn traders in customs clearance zones in Guangdong, Jiangsu and Zhejiang markets, the quotations of cotton yarn sourced from India, Pakistan and Vietnam are in line with prices of domestic cotton yarns of the same count and quality.
Upside down prices of per tonne yarns are making the scenario even complicated. The quotations of light textile market in coastal areas are concentrated at US $ 3,937-3,984/tonne, while the price of C32 package bleached yarn of India and Pakistan reaches US $ 4,020-4,051/tonne.
Why do Chinese weaving companies and middlemen still actively inquire and purchase when the quotation is upside down! The Chinese industry figures out some reasons.
Since the start of 2021, driven by the continued low interest rates of the Federal Reserve and the successive introduction of strong economic stimulus plans by the US politicians, currencies including the Indian rupee and the Vietnamese dong have depreciated against the US dollar, which is conducive to cotton yarn exports.
Secondly, the cotton yarn traders generally have a ‘high price, big discount’ marketing method and it is not uncommon that the actual transaction price is lower than the listed price by US $ 30.92-46.40 per tonne.
Another major factor is that Vietnam, Pakistan, Indonesia and other medium and high-end C32/C40S yarns are mainly high-grade and high-index. Compared with the Chinese domestic cotton yarns, the cotton level is slightly higher and the weaving loss is also dominant.