Chennai: A combination of factors — US ban on Chinese cotton, a sudden surge in orders for garments, additional stocking up, increased exports to Tirupur’s competitors including Vietnam and Bangladesh — have resulted in yarn shortage for garments exporters.

The situation is so grim for exporters that Tirupur Exporters Association (TEA) has pressed the SOS button alleging that mills were withholding yarn supplies impacting the export business. “The current decision of mills will certainly impact the garment units, exports will largely be affected and more number of workers will incur job losses,” TEA’s president Raja M Shanmugam wrote in the letter. “After the US imposed a ban on Chinese yarn, garment units from Vietnam and Bangladesh (competitors for Tirupur) have started sourcing from Indian mills. We do not mind a price increase, but non supply is creating a havoc,” he told TOI. The US administration has banned the usage of cotton from China’s Xinjiang region, saying the region uses the forced labour of detained Uighur Muslims.

Mills have rejected that they were channelising yarn for exports. “Due to supply disruptions, companies across the value chain, both in exports and domestic markets in the textile sector, started building inventory of apparels, home textiles , yarn and fabrics to manage the business continuity. This sudden inventory build up is causing shortages,” said Prabhu Dhamodharan, convenor, Indian Texpreneurs Federation (ITF). “This is only a temporary phase and no need to panic on the availability.”

Yarn prices are rising. Over the past three months, a kilogram of cotton yarn has risen from Rs 205 to Rs 223. “Yarn price increase is not commensurate to cotton price rise. The price increase in cotton is steeper. Prices have risen to Rs 43,500 a candy (356 kg) from Rs 38,500,” Dhamodharan said. Exporters too debunked TEA’s charges.

Published On : 25-12-2020

Source : Times of India