Exports fall by 10 per cent in five months, taant trade badly hit
The novel coronavirus (COVID-19) outbreak has severely affected exports of cotton yarn, fibres and garments in rural Bengal, disrupting the textile industry on the whole. According to traders, export of taant has been particularly hit in the state.
While India's export fell by 10 per cent in the last five months, garment export fell by 7 per cent, according to the traders' union in Kolkata. This has also led to a drastic drop in prices over the last five weeks.
Among the worst hit are weavers across West Bengal, who suffered huge losses as their exports slumped. The trade route from Gardenreach in Kolkata has been closed, along with the Silk Route in Sikkim, Bihar and neighbouring Nepal.
Sampa Singha Roy, who runs an export business through Satyam Boutique in Chinsurah in West Bengal's Hooghly district, said cotton yarn production dropped significantly, impacting exporters’ margin.
“Indian cotton exports, especially taant, came to an abrupt halt. This is not only affecting exporters, but mill owners also. Weavers are suffering major losses,” Sampa said.
“Cotton is a natural fiber and a luxurious commodity. We have never seen such low in the last 20 years. Coronavirus pandemic has affected the market badly,” Rupam Dhar, garment factory owner in Barasat, said.
Sampa Sinha Roy runs an export business. According to her, cotton yarn production dropped drastically, affecting exporters' margins. Photo: Nibedita
Meanwhile, the global cotton economy is headed towards a slowdown. India’s cotton-spinning industry is dependent on its exports to China.
China uses India’s cotton to make finished products, which are then exported to the United States.
A slump in India’s exports to China has hit the global cotton industry. Additionally, as US President Donald Trump imposed tariffs on China for its alleged unfair trade practices in July 2018, the ongoing economic conflict between the world's two largest national economies have impacted the circular economy as well.
In fact, data from the United States Department of Agriculture showed net sales of cotton fell 30 per cent from the previous week.
India depends on China for export of cotton-based raw materials like linters. These raw materials are used to make bank notes, paper for documentation, etc. Similarly, production of ignition material for weapons and some medicines are affected.
According to market sources, traders are sceptical of starting any new deal.
“We buy raw cotton to produce our own fabric. The fabric goes through two processes: the spinning, where raw cotton is turned into a thread, and weaving where the thread is woven into fabric. The benchmark variety of cotton jumped to Rs 12,373 a quintal on Friday from Rs 11,698 a quintal in the beginning of the month,” Sampa Roy said.
It is also speculated that the decline in raw material prices would benefit textile mills and their profit margins may go up in the coming quarters.
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