India’s VFY Prices Surge in November as China Faces Weak Demand and Market Challenges
India’s VFY Prices Surge in November as China Faces Weak Demand and Market Challenges

India’s VFY Prices Surge in November as China Faces Weak Demand and Market Challenges

  • 10-Dec-2024 8:00 PM
  • Journalist: Francis Stokes

The Asian Viscose Filament Yarn (VFY) market exhibited a bullish trend in November 2024, largely driven by evolving demand dynamics, geopolitical factors, and seasonal influences.

In China, VFY prices experienced minimal fluctuations during the period, influenced by the United States' announcement of new tariffs. The US fashion industry's dependence on Chinese apparel sourcing is under scrutiny due to rising tariffs, forced labor allegations, and escalating geopolitical tensions. Additionally, the political instability in Bangladesh following the fall of the Sheikh Hasina government disrupted the textile sourcing supply chain, further impacting the VFY market in the region. These circumstances created opportunities for neighboring countries, especially India, to strengthen their position in the global VFY market.

The Indian VFY market showed robust performance during November 2024. Prices for VFY in India improved by 3.66% in November, reaching INR 420,400/MT Ex-Surat. This upward trend was primarily fueled by strong demand, government initiatives, and increased overseas export activity. Reports indicate that India’s share of apparel exports to the US and UK rose to 7% and 6%, respectively, in 2024, compared to 6% and 5% in 2023.

The Indian government has been actively promoting the textile and apparel sector through initiatives such as the Production Linked Incentive (PLI) scheme, aimed at boosting domestic manufacturing and exports. Union Minister Giriraj Singh highlighted the Textile Department's vision of growing India's textile market from USD 176 billion to USD 300 billion. "Under the leadership of PM Modi, I am confident we will achieve new heights," he stated.

India’s textile exports rose by 11.56% year-on-year in October 2024, reaching USD 1,833.95 million. Meanwhile, apparel exports recorded a remarkable growth of 35.06%, totaling USD 1,227.44 million. According to the Confederation of Indian Textile Industry, cumulative exports of textiles and apparel in October 2024 increased by 19.93% compared to October 2023. This growth underscores the sector's strategic importance in India’s export economy and its ability to capitalize on global opportunities for VFY.

China's VFY market encountered challenges from low production costs, rising logistics expenses, and geopolitical uncertainties. Feedstock trends significantly influenced these issues, with softwood pulp prices briefly rising before falling, and hardwood pulp prices gradually declining throughout November. Additionally, caustic soda prices fluctuated sharply, dropping by 5.7% in the latter half of the month, adding to production cost pressures for Chinese VFY manufacturers. Despite these challenges, the October report indicated a slight improvement in overall textile exports, reflecting some resilience in the market.

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