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Polyester yarn firms sweat over Yuan dip

Textile raw material polyester yarn imported China has begun to worry Indian manufacturers as a devalued yuan sharpens the competitive advantage of the Chinese products.

, ET Bureau|
Updated: Aug 31, 2015, 10.11 AM IST
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CHENNAI: Textile raw material polyester yarn imported China has begun to worry Indian manufacturers as a devalued yuan sharpens the competitive advantage of the Chinese products.

China on August 11 took monetary policy measures that resulted in its currency losing strength by about 2% and more in consecutive days, triggering a rout in the global stock markets and improving prospects of Chinese goods in the global market, including India.

The Chinese polyester yarn, now increasingly made from recycling the ubiquitous poly-ethylene terephtha Rs 115 a kg of late (PET) bottles, costs the most-used 30s-count variety while the same manufactured at Indian factories and sold at the country's largest markets such as Ludhiana Punjab, and Malegaon in Maharashtra. The Indian market for polyester yarn hovers in the range of 1.8 billion kg, with a value of approximately Rs 2.16 lakh crore. India imports a portion of its requirement for the materi al from China, and South-Asian nations such as Malaysia and Indonesia With the currency devaluation, fears of dumping have now surfaced.

"The Chinese devaluation has raised some fears, but what is more worrisome is that a large portion o their knitters and weavers have adopted recycling PET bottles. With more efficiency refinements, the quality of PET bottle yarn is slowly beginning to compare favourable with India's virgin yarn produce," says Pinkesh Jain, MD of Mumbai Everflow Petrofils, which imports 2,000 tonnes of polyester yarn every month.

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