US curbs on China cotton drive Indian yarn prices, Pg11

Key Highlights:

• Indian apparel exporters have urged the Commerce and Industry Ministry and the Textile Ministry to regulate cotton yarn exports due to a sharp price surge.
• The price increase is attributed to US restrictions on cotton from China's Uyghur region, where forced labor allegations exist.
• Cotton yarn prices have risen by approximately 60%, from Rs 250 per kg to Rs 400 per kg, impacting apparel manufacturing.
• India is the world's second-largest cotton producer, while China holds a 29% share of global cotton production.
• Increased demand for Indian cotton and cotton yarn is coming from major apparel-producing nations like Bangladesh and Vietnam.

Detailed Insights:

• The Apparel Export Promotion Council (AEPC) highlighted that the US restrictions, particularly the Uyghur Forced Labor Prevention Act (UFLPA), have made countries more cautious about supply chain traceability.
• The AEPC specifically requested measures to regulate the export of cotton yarn, especially 20s count and above, to stabilize prices and ensure competitive rates for domestic units.
• Limited stock availability with ginners and reduced arrivals have compelled mills to rely more heavily on auctions conducted by the Cotton Corporation of India (CCI).
• The AEPC noted that much of the cotton has moved from farmers to traders, leading to hoarding and speculative practices in the market.
• The global emphasis on ethical sourcing and supply chain traceability has redirected demand towards Indian cotton yarn, which was already in short supply.

Key Concepts Involved:

• Uyghur Forced Labor Prevention Act (UFLPA): A US law establishing a rebuttable presumption that goods from China's Xinjiang Uyghur Autonomous Region are made with forced labor and prohibited from import into the US.
• Cotton Corporation of India (CCI): A public sector undertaking under the Ministry of Textiles, serving as the central agency for Minimum Support Price (MSP) operations and market stabilization in cotton.
• Apparel Export Promotion Council (AEPC): The official body of apparel exporters in India, established in 1978 under the Ministry of Textiles, promoting and supporting garment exports.
• Supply chain traceability: The ability to track and document the history, location, and movement of goods and materials throughout the supply chain, from raw materials to the final destination.