Yarn woe sends Tirupur exporters into a tizzy
The ever spiraling price of cotton yarn is sending the knitting and garment export hub of India, Tirupur in to a tizzy. According to the exporters, since the yarn price is not stable, they are very careful when accepting new orders.
For example, the yarn price which stood at Rs 139 per kg in August 2009 is now quoting at Rs 250 per kg and is also not available in adequate quantities. Between March and May this year alone, prices climbed steeply from Rs 165 per kg to Rs 202 a kg
The exporters are not able to increase the prices accordingly as orders are taken 4-5 months in advance, which has caused massive losses for the Tirupur knitting sector, which exports around Rs 120 billion worth of clothing and textiles.
Commenting on the issue of spiraling prices of yarn, Mr A Sakhtivel President – Tirupur Exporters Association (TEA) informed fibre2fashion, “In the last eight months, because of incessant rise in yarn prices, the export businesses in Tirupur have not been able to accept orders, due to which all of us have suffered”.
He wrapped up by saying, “Now with the government stopping exports of cotton yarn, I foresee that, yarn prices will stabilize and hope 2011 will be a good year”.
Mr D Prem, CMD - Prem Durai Exports Pvt Ltd said, “Right now cotton and yarn prices have increased but on the contrary we can expect good growth next year because of the problems in China, as a lot of buyers have switched to India. I think India is next destination as an alternative destination for replacement so the future will be good.
It's a global phenomenon that people would call for ban on yarn exports, but today we have an open trade so there is no point in actually banning exports. But we feel the prices have to come down because it is a very artificial increase.
“It has definitely affected our business as raw material accounts for 60 percent of the cost of the garment, so it has a created a very negative impact. The dollars exchange rate has been in our favour, which has helped stay above the water and we look for a better future”, he concluded by saying.
Mr Shiva, Export Manager - Stencil Apparel had this to say. “We are a garment exporter and we buy yarn from outside mills and make garments but yarn prices have skyrocketed and buyers are not willing to shell out higher prices.
“We have a large quantity of orders in hand, but we are not able to get yarn from the mills. Even though we are buying at high rate they are not delivering the yarn, which is the main problem facing Tirupur based exporters.
Only the exporters who are having their own spinning mill can survive and since we like many others are small exporters, it has become very difficult to do business and even though yarn export has been banned, it is still not available in the market”, he finished off by informing.
Fibre2fashion News Desk - India