Here's why India's apparel exports will increase in coming months

Coal prices in China are on the rise due to tight supply, toughening emissions standards and strong demand from the industry, causing power rates to rise by more than 30 per cent. This further escalated production costs and selling prices. Almost all the factories in the country are currently operational for only 2 to 3 days a week, as per the new rules of the Chinese government. This situation is expected to continue till December 2021.

Coal shortage has been caused as operations at major ports such as Ningbo and Yantian were suspended due to new COVID-19 waves. Imports from Australia, a major coal-exporting country, are monitored at these ports.

Textiles and clothing units located in Jiangsu, Zhejiang and Guangdong in China have been affected due to power shortage. These regions make for more than the 30 per cent of the total apparel and textiles production of the country. In addition, textiles exports from Xinjiang have been impacted due to labour issues.

Exports of cotton and cotton products from India has been rising continuously due to higher international cotton prices compared to the prices of Indian cotton. The US ban on Xinjiang cotton has further supported the demand for cotton from India.

An expected fall in cotton area harvested in China, India and Pakistan may put further pressure on cotton prices. Moreover, shipping and logistics costs have also been rising consistently.

The production and exports from Vietnam have depleted due to social distancing measures in the country and a shortage of labour amid COVID-19. Many buyers are expected to shift to new suppliers due to delays.

The monthly average of apparel exports of India was $1.14 billion in Q4 2020, which increased by 9.30 per cent to $1.25 billion in H1 2021, according to Fibre2Fashion's market analysis tool TexPro. It is expected to rise further by 20.02 per cent in H2 2021 to reach $1.50 billion.

As for the textile exports of India, the monthly average went from $0.99 billion in Q4 2020 to $1.28 billion in H1 2021, rising by 29.42 per cent. It is expected to escalate further by 14.18 per cent to $1.47 billion.

ALCHEMPro News Desk (KD)