Surat, India: In August 2023, Polyester Filament Yarn (PFY) exports from China to India witnessed an astounding month-over-month increase of 552%, reaching an all-time high. This surge in PFY exports was primarily driven by a rush to fulfill orders before the Bureau of Indian Standards (BIS) certification requirement for yarn imports, which is set to take effect on October 5.
According to data from the China Chemical Fiber Website (CCF), out of the 371.1 Kilotons (kt) of PFY exported by China in August 2023, a remarkable 80.9kt were destined for India. This surge in exports to India marked a significant departure from previous months, reaching historic levels.
The impending implementation of BIS certification on October 5 prompted Indian importers to stock up on PFY from China, as the new regulations will impose restrictions on PFY imports from China. From January to August 2023 alone, PFY exports to India reached an impressive 403kt, surpassing the total export volume of 306kt for the entire year of 2022.
Ashish Gujarati, former president of the Southern Gujarat Chamber of Commerce and Industry (SGCCI) and a leader in the powerloom industry, expressed concerns, saying, “India, particularly Surat, is the leading importer of PFY from China. However, the BIS certification will prohibit imports from China starting October 5. We rely on AA-grade yarn for our high-speed modern machines, which is not domestically produced in India. We have sought an exemption for specialized yarn from BIS certification, but our pleas have gone unanswered.”
Despite the surge in PFY exports to India in August, sea freight rates did not increase as expected. Data from the CCFGroup indicated that freight rates from Ningbo to India’s Nhava Sheva port began to rise in early August, reaching approximately US$1400/40HQ by the end of August, before declining again in early September. The highest increment during this period was approximately $400.
Textile industry experts in India have highlighted the international quality of Chinese PFY yarn, which has yet to receive approval under the new BIS regime. Chinese PFY yarn meets AA-grade quality standards and is ideally suited for the high-speed modern powerloom machines installed in Surat, India.
Around 90% of PFY imports from China are directed to Surat, a city boasting the largest number of high-speed modern machines, with approximately 1.10 lakh such looms out of a total of 6.60 lakh powerlooms in the region. The current demand for AA-grade PFY stands at approximately 13.40 lakh metric tons per annum.
Over the next five years, the Surat textile industry plans to add an additional 1.69 lakh high-speed modern machines, further increasing the demand for AA-grade PFY to about 24.25 lakh metric tons per annum.
However, domestic production of AA-grade yarn is currently limited to 1.30 lakh metric tons per annum, falling significantly short of current and future demand. Industry associations in Surat, representing weavers and knitters, have called on the Indian government to grant exemptions for specific AA-quality yarn, as they argue that the absence of international-standard yarn could force the shutdown of high-speed modern machines.
“The impending implementation of BIS certification is causing concerns within India’s textile industry, particularly among businesses that rely on high-quality yarn for modern machinery,” stated Bharat Gandhi, chairman of the Federation of Indian Art Silk Weaving Industry (FIASWI).”