Home textile exporters here have been pushed to the wall as prices of yarn have shot up by 35 % in the last three months. The abnormalrise is attributed to a direct fallout of the Central government tinkering with its cotton and yarn export policy.
Cotton is exported in huge volumes ignoring the demand of the domestic consumers such as spinning mills who cater to the requirements of specific categories such as home textile exporters. Around half the spinning mills in the nation are in Tamil Nadu and consequently the demand for yarn is high in the State. Another factor that contributed to the rise in yarn price is thelesser arrival of cotton in the markets.
In Karur, hundreds of home textile manufacturers and exporters have been affected by the steep rise in prices of yarn and are struggling to meet their orders. Though the Karur home textile industry fetches foreign exchange to the tune of Rs. 4,000 crore a year, the rise in yarn prices have upset their calculations and future plans.
Home textiles products are made from lower count yarn for which the consumption of cotton is high compared to higher count yarn. With spinning mills running short of cotton, they are inclined to produce higher count yarn which leads to huge shortfall of lower count yarn for the Karur manufacturers. Even if it is made available, the price of lower count yarn is very prohibitive, according to Karur Exporters' Association president ‘Atlas’ M. Nachimuthu.
“Most of the Karur home textile exporters enter into annual price contracts with their clients abroad and the sudden and steep increase in prices of yarn directly impacts them. They are also struggling to meet the delivery time schedule due to shortage of required count yarn and bleeding financially tohonour commitments,” Mr. Nachimuthu added.
The price quotes of Karur home textile exporters are at a higher side compared to those from China, Pakistan and Bangladesh among other countries who are the major competitors. There was the dire reality of customers migrating to exporters from competing countries resulting in India losing its global market share in home textile exporters.
The Central government must seriously revisit the cotton and yarn export policy that was hurting the Karur home textile exporters on a massive scale.Export of cotton must be stopped immediately and needs of domestic spinning mills looked into as top priorities, Mr. Nachimuthu said.
Source: The Hindu, India, 25-Mar-2017
Saturday, 25 March 2017