China, largest importer of cotton yarn, has decided to raise spending on farm subsidies 10 per cent. The hike may hit Indian mills catering to the Chinese market. This subsidy is likely to boost yarn production in that country, as cotton will be available to Chinese spinning mills at a cheaper rate. It is being said that cotton yarn export to China accounted for half of India’s overall exports of the commodity. Consistent growth has been recorded in cotton yarn export to China, as so far, mills in that country have secured cotton at higher prices. Expert feels that due to this decision fall of about 20 per cent in yarn export to China this year. Some are considering other destinations such as Vietnam, Cambodia and Latin America, though their volumes cannot match demand from the Chinese market.
