Friday, March 7, 2008


The 2008 Union Budget: A Textile Perspective

The 2008 Union Budget: A Textile Perspective

Capital formation priority as provision for TUFS increased to Rs 1,090 in the next fiscal
The Macro Economics
GDP in the fiscal 2007-08 increased by 9.6% driven by growth in services and manufacturing which are estimated to grow at 10.7% and 9.4% respectively. The growth rate of agriculture for 2007-08 is estimated to by at 2.6%. Saving rate and investment rate is estimated to be at 35.6 % and 36.3% respectively, by the end of 2007-08. FDI amounted to US$12.7 billion and FII to US$18 billion. Reduction of taxes has led to increase in Tax-to- GDP ration set to rise from 12.5% at the end of 2007-08 from 9.2% in 2003-04.
The Textile Industry
The Textile industry has seen a tough fiscal go by and this budget was looked upon for relief. Though the finance minister showed concern for the exporters who are dealing with a strong rupee, nothing new was announced.
No duty-cuts expected by the industry may be disappointing. The National Calamity Contingent duty (NCCD) of PFY which was levied only on PFY has been removed.
There was no change in the peak rate of custom duty, and all other rates for yarns and fiber, textile machinery were left unchanged. General CENVAT rate on all goods is reduced from 16% to 14% to give some stimulus to the manufacturing sector in general.
However there were other positives to cheer the industry. Growth in the capital goods has been impressive at 20.2% and to sustain capital formation in the textile industry, provision for TUFS in textiles has been increased to RS 1,090 crore in 2008-09 from Rs 911 crore in 2007-08.
The Scheme for Integrated Textile Parks (SITP) shall be continued in the 11th plan with the provision of Rs 450 crore in 2008-09. Also, it’s been planned to scale up the production and infrastructure in the six centers of - Varanasi and Sibsagar for Handlooms, Bhiwandi and Erode for powerlooms, and Naraspur and Mooradabad for handicrafts, to see them become mega-clusters. An initial provision of Rs 100 crore has been made with an estimate of Rs 70 crore to be needed for each cluster. Allocations to the Hand loom sector have been increased to Rs 340 crore in the next fiscal.
Coir Boards income has also been exempted from income tax. This may help the Coir Board business, involved in the manufacture of the specialty coir fibre, mostly exported and used for making mats and ropes.
Ultra Mega Power Project (UMPP) in Maharashtra and Tamil Nadu would help in alleviation of the power crises faced by the textile manufacturers.
Key Highlights:
No additional scheme for exports hit by strong rupee.
NCCD of 1% remove from PFY.
Excise Duty - general CENVAT rate on all goods is reduced from 16% to 14%
Provision for TUFS in textiles increased to RS 1,090 crore in 2008-09.
Varanasi and Sibsagar, Bhiwandi, Erode, Naraspur and Mooradabad to be developed as mega clusters.
Coir Board income tax exempted
View Budget Speech 2008 -09


Wednesday, January 23, 2008


Exports from Indian spinners in Dec 07 - VIscose Spun Yarn.

Exports of Viscose spun yarn – Dec 07

Out of the 47000 MT of analyzed spun yarn exports in Dec 07, the major share is cotton. Viscose was 8% at the second position followed by PV, 6%, Spun Polyester 6% and PC yarns 4%.

The demand for the viscose yarn is sluggish for the past two months and its direct impact is on the pricing. The prices finally started their return journey after almost a year of rise. Undoubtedly the viscose yarn spinners from India are gaining the name for quality yet they are facing a close competition from Indonesian spinners.

Count-wise export of Viscose spun yarn –

The major count was 30s, almost 45% of the total quantity with an average FOB realization of USD 3.93 per Kg.
With in 30s viscose spun yarn, the weighted average realization FOB was as under
Gray Yarn- USD 3.86/Kg – (Max 4.14 Min 3.60)

Dyed Yarn - USD 4.68/Kg (Min 4.29 Max 5.38)
In dyed yarns exports Belgium was all over with 72% of the total volume, followed by Egypt and Italy.
The average FOB per Kg realization* in dyed viscose was at USD 4.32/Kg for all the counts.

Realisation* - The term realization is USD per Kg and it is the weighted average.

The detailed report covers the movement of cotton, polyester, viscose spun yarns and the blends as well. The information is part of YnFx Yarn ExportWatch report and for your copy of the detailed report please write to

Friday, December 28, 2007


Exports from Indian spinners in Nov 07

The month of October 2007 had around 1000 FCLs dispatched of cotton spun yarn from the west coast of India.

Following were the top 10 counts in terms of volumes with the respective FOB realisations

1/30s combed - 104.69

1/40s combed - 117.06

1/20s carded - 81.23

1/30s carded - 92.70

1/24s carded - 85.85

30s Combed was the peak count exported from India in Turkey. As compared to the last month’s figures it showed 10% increase. 40s Combed stood up second in the volume and the imports reduced by 20% in this count as compared to last month.

Country-wise export from India

In October 2007 Turkey was ahead of Bangladesh on volumes with approx 140 FCL followed by Egypt (62 FCL) and Portugal (60 FCL).
The Best average FOB realization was fetched as usual by Italy (INR 144) followed by Mauritius (INR 136)

Now lets see how each country imported in October, starting from Turkey.

Ne 1/30s Combed Cotton High $ 2.78 Low $ 2.65
Ne 1/40s Combed Cotton High $ 3.07 Low $ 2.95
Ne 1/31s Combed Cotton High $ 2.63 Low $ 2.63
Ne 1/20s Combed Cotton High $ 2.58 Low $ 2.55

Total 84 FCLs of 1/30s were sold to turkey and the price difference between the high and low is 13 cents. this would be mainly on account of varied payment terms, Quality parameters, brand value and commission. The commission varies from 1% to 3%, depending upon the volume.

However the picture would change now, and 1/40s quantity should increase significantly int eh coming months and 1/30s should reduce, as per the last year trends.


Ne 1/26s Combed Cotton High $ 2.60 Low $ 2.55
Ne 1/30s Combed Cotton High $ 3.00 Low $ 2.95
Ne 1/34s Combed Cotton High $ 2.90 Low $ 2.80
Ne 1/40s Combed Cotton High $ 3.08 Low $ 2.95

26s Combed was the peak count exported from India in B’Desh. The demand was stable in this count as compared with Sept. 2007

30s Combed replaced 40s to be second highest imported count as compared to last month.

26s Combed was the peak count exported from India in B’Desh. The demand was stable in this count as compared with Sept. 2007

30s Combed replaced 40s to be second highest imported count as compared to last month.

However there are major exports from Eastern and Southern ports of India, which are not accounted here. in the coming reports, I will try to add that data as well to give a balanced picture.


Ne 1/30s Combed Cotton High $ 2.79 Low $ 2.60
Ne 1/20s Combed Cotton High $ 2.53 Low $ 2.36

Ne 1/30s Carded Cotton High $ 2.45 Low $ 2.36

Ne 1/24s Combed Cotton High $ 2.65 Low $ 2.50
30s Combed Yarn has acquired 17 FCL volume in Egypt market for the month of Oct. 2007

20s combed rolled to second position from first as compared to the last month.

40s Combed demand was diminished as this count was the lowest in the chart as compared to 5 FCL last month.

The other major countries importing yarn from India were Portugal, Russia, Brazil, the details are covered in the report on

Now lets see, how the value added products are doing. though the volume would be less, but as a strategy, they are must to have for balancing your business and future growth lies here.


Compact Yarn exports lowered in the month of October as compared to last month by 20%.

The count which was mainly affected was 30s compact.

The export of 40s compact was at high in the month but still less by 3 FCL as compared to last month

24s Compact was the new entry in the compact category this month.

USA imported the highest Compact yarn in the month of October followed by Turkey with 17% and Bangladesh at 12%

Organic Cotton Yarns

Organic Yarns were good in volumes for the month on Oct. 07. The category raised by 13% as compared to last month.

Bangladesh imported 55% on the Organic yarns this month emerging as big potential in this market.

Turkey reduced it imports by 50% as compared to last month in Organic category.

The 20/2s Organic yarn exports reduced by 50% as compared to last month.


PIMA yarns were reduced in quantities as compared to last month.

The reduction in exports was as much as 40% as compared with the last month.

Italy remained as the the major exporter for the PIMA yarns followed by Peru. Around 15 FCLs were dispatched from the west coast of India all in 50s count and above namely 60s, 74s, 100s and 2/60s.


In my next blog, i will try to cover more on value added products, quantities and FOB values of it, also Melange yarns and Dyed cotton yarn, Viscose spun yarn and other blends.

I am sure if you are exporter of yarn from India or importing yarn from India, the above information would be very useful. and as they say the future is information, so let me make an attempt to provide information to you to take informed business decisions.

Contact me for micro details, if you want.


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