After rising for five consecutive years, exports of man-made fibre (MMF) are likely to fall in the current financial year.
Slow recovery in the US and European countries, coupled with rising raw-material costs and an appreciating rupee, is exerting pressure on MMF exports. The industry estimates that the government’s export target of $3.7 billion will be missed by around $300 million in 2010-11.
During the first quarter of the current financial year, MMF exports had seen a marginal decline of one per cent year-on-year, which aggravated to 30 per cent in the second quarter.
Vinod K Ladia, chairman of the Synthetic & Rayon Textiles Export Promotional Council (Srtepc), said, “The current quarter (October-December), too, is showing similar downtrend. Amid such situation, our exports will fall short by $300 million in FY11 to achieve the target.”
Fabric has been the most-hit segment, with exports dipping 22 per cent and 33 per cent in the June and September quarters, respectively. Yarn exports declined 19 per cent in the second quarter, while made-ups were down 33 per cent. Fibre exports also plunged 22 per cent year-on-year.
Ladia said reduction in duty drawback rates and appreciation in the rupee against the dollar were making India uncompetitive in the global market.
The council in this regard is seeking government’s intervention in stabilising fibre and yarn prices and to ensure its availability. Polyester yarn prices have risen 40 per cent since October this year, according to the council. The trade body has also sought an increase in the duty drawback rates for 2010-11.
The government plans to increase synthetic exports to $7 billion by 2013-14.
