‘Pakistan fast losing share in China’s yarn market’

LAHORE: Textile players have drawn the attention of the government planners to the rapidly deteriorating share of Pakistan's yarn to China, as other regional economies including India are increasing their market share.
They said Pakistan lost its position as the largest cotton yarn supplier to China in 2014 to India, while in August 2015, its South Asian rival recorded 100 percent increase in yarn exports to China. They lamented the only 22.7 percent increase in yarn export to China by Pakistan following increased demand in the Chinese textile industry.
Chinese customs statistics show that in August 2014, Indian cotton yarn exports to China stood at 33.120 million kg that doubled 66.214 million kg in August 2015. The Indian cotton yarn exports during Jan-August 2015 increased to 473.742 million kg from 349.968 million kg during the corresponding period of 2014. The cumulative increase during this period was 35 percent.
Official Chinese customs statistics further reveal that in August 2014, Pakistan's yarn exports to China were 33.244 million kg that was slightly higher than the Indian yarn exports during the same period.
In August 2015, Pakistan cotton yarn exports to China increased by around 23 percent to 41.031 million kg. During the first eight months of 2015, Pakistan's yarn export to China stood at 380.896 million kg against 310.392 million kg recorded during the same period of 2014.
India is not the only country that is making inroads in Pakistan's yarn market, said Gohar Ejaz, the group leader of All Pakistan Textile Mills Association (Aptma). He said Vietnam that was a non-entity in basic textiles at the start of the century has now enhanced its cotton yarn share in the Chinese market close to that of Pakistan. He warned that the growth that Vietnamese spinners were showing would soon relegate Pakistan to the third largest supplier of yarn with India at number one and Vietnam at number two. He said in August 2015 the cotton yarn exports from Vietnam to China were 40.845 million kg against 41.031 exports from Pakistan. He said during the first eight months of 2015, the cotton yarn exports from Vietnam to China increased by 34 percent against cumulative increase of 23 by Pakistan. He said during the first eight months of 2015, the yarn exports to China increased by 43 percent from Indonesia, 77 percent from Uzbekistan, and 90 percent from Japan.
The Aptma Chairman said China relocated some of its spinning capacities to Vietnam, and the country was now reaping it benefits. He said Vietnam has zero rating facility in exports to United States under the Trans-pacific Treaty that would accelerate further relocation of Chinese spinning industry in that country.
Aptma Punjab Chairman Amir Fayyaz said Pakistan was not only losing the Chinese yarn market to India, but also facing threat from its next door neighbour in its domestic market. He said according to statistics compiled by Intracen in 2011 the Indians exported 2,398 metric ton of cotton yarn to Pakistan that increased to 30,708 metric ton in 2014. He said in the first eight months of 2015, import of Indian yarned had reached 25,983 metric ton. At this rate, the Indian yarn export to Pakistan would reach almost 39,000 metric ton. He said the penetration of Indian yarn was increasing at a rapid pace every year.
Fayyaz said Pakistani spinners were making hectic efforts to keep their global yarn market which was evident from the fact that they were forced to reduce their average per kg rate of yarn from $2.81 in 2014 to 2.38 per kg. He said the unit value of Indian yarn declined by 13 percent to $2.7 per kg which was two percent less than that of Pakistan.
Aptma Punjab chairman said yarn prices declined globally due to declining cotton rates, global recession, and falling fuel rates. In Pakistan, the rates of power and energy increased instead of declining in line with global trends. Also, India reduced its natural gas rates to $4.24 price mmfcd, whereas Pakistani authorities have slapped Gas Infrastructure Development Cess at Rs100-200 mmcfd on different industries, besides increasing the gas rates by 12-15 percent recently. He said China is the largest importer of cotton yarn in the world. Pakistan, he added like India also produces its own cotton yarn, but due to high production cost of domestic yarn most of the high valued yarn is being imported from India.