Textile units in Tirupur have asked spinning mills to supply cotton immediately, alleging that the latter stopped supplies without any reasons.

Raja M Shanmugham, president, Tirupur Exporters Association (TEA) said that the mills have stopped supplying cotton yarn and are not taking up the fresh orders.

“They have not given any reasons, despite the fact that prices have gone up by about Rs 50 a kg the past six months,” said Shanmugham, who has written to all the Textile Mills Associations, SIMA, TASMA and ITF to advise their members to supply the yarn continuously to protect the Tirupur Knitwear Exports sector.

Shanmugham said that the current decision of the mills would certainly impact garment units, largely affecting exports and stimulating job losses.

He pointed out that due to non-commitment on delivery schedules, the foreign buyers will not only cancel the orders, but also will not be ready to place future orders with exporting units. He also noted that if the buyers leave the country, it will be very difficult to bring them back at a time when the domestic industry is in at a disadvantage on the competitiveness front, due to the absence of a level-playing field.

The strong domestic market is a permanent one and once the prevailing business ecosystem is disturbed, the future would be unpredictable, he said.

Tirupur Knitwear recorded business worth Rs 50,000 crore in the last financial year.

In his letter to the Association, Shanmugham said the rise in yarn prices the past two months followed the increase in cotton prices. Textile units have been purchasing the yarn despite incurring losses on already committed orders and it is only in future orders that they would be able to negotiate better garment prices from foreign buyers.

The garment sector is facing stiff competition in the global market and operating on wafer-thin margins and in such a crisis situation, stopping yarn supply will deal a body blow to the sector, he added.

Published On : 18-12-2020

Source : Business-Standard