With cotton and yarn prices continuing to swing, textile mills and garment units across Tamil Nadu are pushing for measures to strengthen cotton productivity and availability.
“A surge in worldwide demand for cotton yarn stands amongst the chief reasons behind the volatility in its pricing,” Ashwin Chandran, Chairman of the Confederation of Indian Textile Industry (CITI) said.
Garment units in Tiruppur have planned a meeting today with textile mills to tackle the yarn price issue.
International demand for yarn has strengthened relative to the last couple of years. Demand for cotton yarn had remained subdued since 2023-24.
Demand for textile products across the value chain began picking up last December. Most textile units held onto hand-to-mouth stocks across recent years owing to weak demand.
Demand for yarn from China and Bangladesh has climbed, whilst domestic demand for garments is likewise gaining ground. This has fostered a stronger market for yarn.
Furthermore, hosiery yarn exports are chiefly handled by mills in Gujarat rather than those based within Tamil Nadu.
Nonetheless, the cotton futures market climbed to 92 cents per pound before correcting to around 86 cents. Consequently, prices of cotton, the fundamental raw material, have fluctuated.
“Whilst the landed price of clean cotton has climbed by Rs 70, yarn prices have risen by roughly Rs 95 per kg across the past year,” he said.
“The entire sector’s focus ought to centre on boosting cotton productivity domestically to secure raw material supply, he added.
Meanwhile, the Tiruppur Exporters and Manufacturers Association has pressed the Central and State governments to ban cotton exports.
It stated that the State, particularly its western districts, designs and manufactures a broad range of textile products supplied to both domestic and international markets.
“This sector, predominantly driven by small and medium-sized enterprises, provides employment and livelihoods to thousands of people,” the Hindu reported.
However, since January this year, certain large spinning mills and traders “have been artificially restricting the supply of cotton, causing yarn prices to skyrocket and creating an unprecedented crisis for local manufacturing units — particularly the small and medium-sized ones,” the association alleged.
Last year, cotton requirement stood at 350 lakh bales, whereas current domestic production stands at 290 lakh bales.
Given the existing cotton shortfall, the government scrapped the 11% import duty on cotton, and 62 lakh bales of cotton were imported. Yet cotton prices continue climbing.
This stems from artificial market manipulation, the association claimed. The continuous rise in cotton prices has driven up raw material costs, causing garment orders to be diverted towards other States and countries, it said.
Image courtesy: BaoDau
