May 8, 2022,
Ahmedabad: Already reeling under the aftermath of the cotton price hike, the Gujarat textile industry is now facing a new challenge. Powerlooms in Tamil Nadu have decided to cut production by 50% due to the high prices of cotton yarn and a drop in demand. To make matters worse, garment units in TN’s Tirupur district have declared a strike from May 16 to 21 to protest against the rising prices of cotton yarn. This will impact the spinning and textile processing units in Gujarat adversely.
“Demand in retail has dropped. Orders for grey fabric are down too. So, we are not able to pass on the price hike. From Thursday, around 2.5 lakh looms cut down production by 50% for 15 days. This will impact processing houses in Ahmedabad as we send around 1 crore metres of grey fabric to Ahmedabad daily for processing,” said K Murugeshan, mentor of Tamil Nadu Textile Entrepreneurs’ Association.
Former chairman of Powerloom Development & Export Promotion Council Bharat, Chhajer said, “In South India, yarn prices are decided every month. Yarn prices have been increased by Rs 40 per kg for May. The decision to cut production made by the South Indian powerloom players will impact our spinning and processing industry. A dip in production will also hurt exports.
Currently, we do not get big export orders because buyers are cautious of buying bigger quantities at higher rates.” “Spinner and weavers are not able to absorb the steep price rise of cotton. The entire value chain is under pressure. Grey fabric arrival has reduced by 50% in the past 15 days and we see major difficulties ahead,” said a director of a leading textile process house.
Cotton prices have doubled in around a year. This has created a working capital issue for the textile industry. Industry sources say that though duty on cotton imports has been scrapped, prices have not been lowered. There are no signs of prices coming down till September when a new crop will start arriving, sources added. Chhajer said that the Centre must ban cotton yarn and cotton export temporarily so that supply to the local market can improve. He also said the hoarding of cotton stock should be stopped. (Source: timesofindia.indiatimes.com)