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MMF output declines in first 3 months of FY21

Mar 01, 2021
MMF output declines in first 3 months of FY21

During April-December 2020, output of MMF declined by 18.2 per cent y-o-y to 1,319 thousand tonnes on a cumulative basis. The production had fallen sharply in the initial 3 months of FY21 due to COVID-19 induced lockdown restrictions. In the following months, the decrease in output reduced and, in fact, the production increased by 10.3 per cent in September 2020 backed by easing of lockdown restrictions. In the months of October-December 2020, the output however declined but the fall in production was restricted to the range of 3-6 per cent during these months. The improvement in MMF output in the past few months is on account of unlocking of economy which is believed to have supported the demand for MMF.

Chart 1: Trend in MMF production (Apr-Dec 20)

Source: CMIE

It is to be noted that MMF here includes texturized man-made filament yarn which has a highest share of 70.8 per cent during April-December 2020 followed by polyester spun yarn (18.2 per cent), rayon/viscose blended spun yarn (9.5 per cent) and acrylic yarn (1.6 per cent). Man-made fibre production primarily includes polyester and viscose. Polyester accounts for a majority of the total man-made fibre output close to 80 per cent and viscose holds a share of about 15 per cent in the total production. MMF exports on a cumulative basis, the exports of MMF declined by 17.5 per cent y-o-y to 580 thousand tonnes during the period April November 2020. The exports which had declined considerably due to COVID-19 disruptions in the initial 2 months of FY21 saw some respite going ahead with the unwinding of global economies and trade. As a result, the decrease in outbound shipments narrowed down in the range of 2-8 per cent in the following 3 months except for July 2020 where exports remained almost stable at the year ago levels. While exports grew 8.4 per cent in the month of September 2020, the downward trend in outbound shipments continued during October-November 2020 in the range of 10-14 per cent.

Polyester segment (the most common used textile across globe) which accounts for the largest share in Indian MMF exports contributed to around 90 per cent of the total outbound shipments in April-November 2020 and exports from this segment fell by 20.1 per cent to 520 thousand tonnes during the period. This was mainly due to disturbance caused by COVID-19 in the polyester market. While exports of PSF (polyester staple fibre) increased by 2.6 per cent to 191 thousand tonnes, outbound shipments of PFY (polyester filament yarn) (which accounted for 57% of the total exports) declined by 29.1 per cent to 329 thousand tonnes which dragged down the polyester exports and, in turn, overall MMF exports from India during April-November 2020.