The Indian textile industry is as diverse as the country itself! In comparative term, India is second only to China in terms of spindles and numero uno in terms of shuttle looms and handlooms. India produces variety of fibers like cotton, jute, silk, synthetic etc. While India is the top most producer of jute in case of cotton India ranks third in the world with almost one fourth of the cotton yarn contributed in the global trade by India. In the manmade fiber India can boast of a manufacturer who could be rated as the largest producer of polyester fiber and yarn in the world with a capacity of 2000 KTA. The yarn being the basic building block in the entire value chain from fiber to fabric it has a significant role to play in reflecting the state of affairs of the textile industry. The manmade fiber textile industry in India is vibrant and growing. This is because of the near sale sufficient raw material production base facilitating a wide range of fibers / yarn like polyester, acrylic, nylon, etc. In fact, the fibers and filament yarn produced in India are comparable with the best produced anywhere in the world. Thanks to the large investments that have gone into the spinning sector leading to the production of superior quality yarn. In the global context India accounts for about one fifth of the world spindlege with around 39 million spindles and 0.52 million rotors (aprox. 6%). As far as cellulosic fiber and yarn are concerned, India is one of the few countries in the world that has a large production base which is fairly self-reliant in production of MMF fiber and yarn. Raw materials like PTA, MEG, Acrylonitrile, Caprolactum, DMT and Rayon grade Pulp are manufactured locally. As far as the cellulosic segment is concerned, the industry is manufacturing viscose staple fiber, viscose filament yarn and also products like viscose tyre yarn. Wide range of synthetic yarns including polyester filament yarn, nylon filament yarn, polypropylene filament yarn, and nylon tyre yarn are also manufactured by India. In fact if one looks for a basic difference between the situation in China and India and their competitive advantages vis-à-vis strengths India leads China in the domain of production of almost every raw material for manufacture of synthetic fiber and yarn domestically. One major fiber / yarn that is today used for a variety of fabrics that is polyester being now a major production item in which India tops the world a tremendous competitive advantage is provided to the Indian yarn manufacturers and processors in the global context. The domestic consumption as well as exports of the yarn therefore has continuously grown keeping pace with the growth of textile industry in India.

Despite all the narration as above, indicating the fact that the Indian textile industry uses all kinds of fibers / yarn, it continues to be predominantly cotton based. The consumption of cotton fiber vis-à-vis other fibers ratio in India is 62:38 compared with the global pattern of 40:60 in favour non-cotton fibers / yarn. This is perhaps because India is the third largest producer of cotton following China and USA. Of late, however the consumption of the synthetic yarn is on increase. The manmade fibers / yarns industry in India has achieved significant growth during last two decades with the installed capacity increasing from 223 million kg in 1980-81 to 2565 million kg by June 2006. The actual production on the other hand has increased from 188 million kg during 1980-81 to 2147 million kg (Prov) by 2005-06. The sharp increase in production of polyester fiber and yarn has made India emerged as the fifth largest producer of manmade fiber / yarn in the world.

If we look at the world scenario, the available information indicates that the second quarter of 2006 was marked by two major features. The first - the world yarn production reached its highest level in three years in the second quarter of 2006 thanks to the higher Asian output. The second - global fabric production also recorded an increase compared to the previous quarter due to a higher output in South America and despite slightly lower output levels in Europe as well as Asia. The output however still remains below the level of second quarter of 2005. In the second quarter 2006 the rising Asian and South American inventories have seen the world yarn stocks registering the highest level. In fact it is also observed that polyester staple fiber prices begin decreasing in China from the beginning of early January 2007 as the demand from textile industry was progressively weakening.

One of the major demands the textile fabric industry which processes almost 40 per cent of the manmade yarn in the country at Surat during the deliberations at the Yarn Expo 2006 was that with the declining trend of crude oil prices in the international market the fiber / yarn producers must reduce the prices they hiked once under the pretext of higher petrochemical input cost for the manufacture of the raw material like MEG and therefore the fiber and the yarn. This was defended in a hush hush voice by the representatives of the major organized sector fiber / yarn manufacturers saying that long-term view has to be taken and it would be unrealistic to expect that immediately on the international crude prices getting reduced the fiber / yarn prices would come down. As of now the market reports indicate that the yarn trade is passing through a severe financial crunch. This is because weakness at various levels in the textile industry as percolated to the yarn market also. It may be interesting to note that the textile value chain extends from raw material to fiber to yarn to fabric to finished product like clothings and made-ups. Spinning, weaving, knitting, processing, manufacturer of clothings and apparel are various sectors which form the structural pyramid of the textiles starting from fiber to finished product. With the global size of manufacturing capacities established the fiber manufacturing and spinning are the stronger segment globally competitive while weaving and processing are comparatively weaker segments despite the recent initiative of technological upgradation. Because of this the recession in other sectors of the structural pyramid of textile sector has affected the comparatively stronger yarn sector also. It is perhaps because of this despite the weakness in the textile sector and thereby the severe demand slow down in the yarn trade one of the leading POY manufacturers has hiked the price of POY by Rs.1.00 to Rs. 73.50 per kg since January 2007! This has happened despite the crude oil prices continuously declining over last few months!! It was expected that the spinners would slash the prices once raised under the guise of increasing crude oil price in the present situation of the falling crude oil prices regime thereby transferring the benefits to the textile sector. In reality exactly reverse has happened! Is this called the free market economy? The answer may not be easy to come by.

Cotton is also not an exception. On the contrary the situation seems to be worst as low demand on one hand and increasing cotton crop on the other has affected the moral and sentiment of the market. The result is the cotton yarn prices have slumped by as much as 10 per cent during last one month.

It is in this situation, TEXTILE REVIEW thought of presenting the analysis of the current situation and also trying to interpret the future through the perceptions of those who matter. In the long-run however with the kind of growth projections for the textile sector, the basic building block - yarn industry is bound to grow. This perhaps explains the logic why Mukund Choudhary the numero uno in the spinning sector wants to touch one million mark in spindlege sooner than the later!