TIRUPPUR: The price of cotton yarn used for knitwear production in Tiruppur increased by Rs 10 to Rs 12 per kilogram on Wednesday, the first day of the fiscal year, as the price of cotton in the global market increased due to the war in the Middle East. Earlier, the yarn price went up by Rs 7 per kg at the end of February and by Rs 7 per kg in mid-March, industry sources said.
Manufacturers claimed that the production cost of a single knitwear garment will rise by up to Rs 6 with the latest hike.
The upward price trend has worried exporters too.
KM Subramanian, President of Tiruppur Exporters’ Association (TEA), said, “Cotton prices in the global market have risen sharply due to the war. Accordingly, cotton prices in India are also rising.
Over the past four weeks, the price of a candy of cotton (356 kg) in India has risen from Rs 54,000 to Rs 64,000, in line with global market rates. This is a price hike of about 20% within a short period. This is the reason for the increase in the price of cotton yarn.”
The spiralling prices have compounded the challenges faced by exporters on account of overseas tariffs and rising costs of other raw materials.
“We are already facing various challenges, including difficulties in shipping finished knitwear garments and rising raw material prices due to the war. The rise in the price of yarn will definitely affect us. This will increase the cost of producing a knitwear garment by up to Rs 6.
We cannot insist on this increased price with foreign buyers because the prices of current orders have already been finalised through contracts. Therefore, this is an additional burden for us,” Subramanian added.
On Wednesday, the prices of all varieties of cotton yarn used in the production of knitwear have increased by Rs 10 to Rs 12 per kg. For example, the price of 20s combed yarn has increased from Rs 265 to Rs 277 per kg. S Saravanan, Core Committee Member of Tiruppur Yarn Manufacturers Association, said, “We are currently at the end of the cotton season in India. However, there is no shortage of cotton in the country.”