Sudden rise in cotton yarn price worries apparel exporters


Apparel exporters have expressed their concern over sudden increase in cotton yarn prices from Rs. 211/kg to Rs. 248/kg between 1st March, 2013 and 1st April, 2013.

The apex apparel body Apparel Export Promotion Council (AEPC) Tuesday raises the issue with the Ministry of Textiles.

Chairman, AEPC, Dr A Sakthivel on behalf of the entire apparel and garment manufacturing units made a presentation on Tuesday to the Secretary Textiles on the pressing crisis of rising yarn prices.

The garment exporters in India are taking up the export orders before four to six months after quoting the prices based on the prevailing cotton yarn prices. In the above situation, the sudden hike in the yarn prices is affecting the pricing calculation and the margin could not be added, as the orders have been taken in tight competition, Sakthivel informed this in a press statement.

He said, "In the current year (2012 - 2013), the cotton yarn prices have already crossed 900 million kilos, which is a record export of such demand in our competing countries; mainly China."

Chairman AEPC during his presentation emphasized that, "Due to increase in demand and high cotton yarn prices, not only it has affected the garment sector, but also other sectors are suffering viz. Handloom, Powerloom, Made-ups for domestic as well as export market. The higher cotton yarn prices have adversely impacted the selling prices of cotton fabric in domestic market resulting inequilibrium in whole textile chain."

The similar situation in the cotton yarn prices arose one and a half years' back. In this period, due to high cotton yarn prices, a large number of buyers went out of India. With a great difficulty on the part of the Garment, Handloom, Powerloom, Made-ups exporters, the buyers were persuaded to come back to India. However, with the current high cotton yarn prices, the buyers are once again running out of India, since the prices of cotton yarn in our competing countries viz. China, Bangladesh & Cambodia are comparatively cheaper and garment exporters in these countries have not increased the garment prices.

Pressing on the critical aspect of job Chairman remarked that, "We have seen the big job losses in India due to drop in export orders 1-1/2 years' back because of the abnormal hike in cotton yarn prices. Now, we request you to kindly take suitable action to bring-down the 'cotton yarn prices', otherwise the whole textile industry will suffer."

Further, it is fact thatt there is no co-relation between the prices of cotton and cotton yarn.

Secretary Textiles after the meeting in her concluding remark has advised all cotton yarn producers to keep the prices low so that there is no need of Government intervention. Lot of power looms are getting stopped leading to a job loss.