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1)
Dear friends

It is with great pleasure that I am addressing you today, courtesy and appreciation to china cocoon and silk exchange, organizers of this forum.

2) Intro
I have been analyzing the indo Chinese silk market for past 18 months and u will be aware that I have been publishing many reports in esilk.net..

Looking at today’s situation of the indo Chinese silk market, the volatility and the unpredictable movements we have seen right through 2005 has made it into a very unsafe business.
For the longer term benefits of the indo Chinese silk industry it is very essential that the silk industry in china go through a stable phase
India is a major buyer for silk yarn and fabrics for china. And it is to china's advantage if stability is maintained. No business likes to lose money continuously and this year has seen heavy losses to the Indian industry due to sudden price crashes, however the supply demand situation also matters and the negative factors like the high prices, low demand, new crop and the proposed anti dumping on fabrics played a major role in fuelling the down trend.
However we have already seen a huge correction in the last few weeks and its better to maintain stability for the next few next few weeks. The meltdown has shaken the Indian buyer’s confidence and needs to be restored. Unless that happens the demand from India this year may be very weak. India will require more than 300 tonnes of raw silk in June and this may not happen into reality if there is no stability in china .
The Indian exporters buying will start in the next few weeks and will followed by the Indian importer traders. But again this will entirely depend on the Chinese situation, if it weakens then the demand will go down to about 150 tonnes and if remains stable then we can see a 300+ tonnes demand every month .




3) anti dumping ,

The proposed anti dumping which may be implemented this year will change the demand pattern of the fabrics from India , the volume is likely to be affected. However this can be compensated by the increase in raw silk demand but will certainly not match the volumes of last year, the anti dumping will reduce the number of fabric importers and also the general demand. We can expect a standard trend of 3-4 million meters of fabric per month after anti dumping comes in . The anti dumping will open up the fabric production centers in India which had closed down due to the huge supply of fabrics from china .
So in both ways china will not lose the advantage, though there may a shift in the product demand from fabric to yarn



4) ,
The Indian Chinese silk bilateral trade is at present unorganized on both sides with quite a few problems and I think it is time to get it organized with a common forum. Represented by both sides the forum can form certain set of rules to be followed strictly and maintain a healthy and vibrant silk trade between both countries.
It has to be the Chinese initiative to protect its market and it has to protect its Indian market also by making silk a stable product.

Finally I will conclude with following points
1)the bottom-line today is we need stability in raw silk and stability will bring the confidence and demand back from India ,
2) The anti dumping of fabrics will raise the demand of raw silk in India .
3) There is no alternative to Chinese raw silk yarn for India’s export needs

I again appreciate china silk and cocoon exchange to the transparency they have provided to the world silk community .

Thank you