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Garment units in Tiruppur fall silent as high yarn prices spin trouble for them

Nearly one-third of existing garment and industrial processing units have turned idle for the past three months in Tiruppur as spiralling yarn prices render the business unviable.

TIRUPPUR: Nearly one-third of existing garment and industrial processing units have turned idle for the past three months in Tiruppur as spiralling yarn prices render the business unviable.

The town, known as India’s knitwear hub, wears a desolate look as exporters rue their inability to execute orders. They squarely blame steadily-increasing yarn prices. Prices of all kinds of cotton yarn (the 30s and 40s count) with combed and semi-combed varieties were hovering around Rs 220-290 per kg in 2021. They started a northbound journey, with cotton yarn mills raising prices by Rs 30-40 per kg every month, from August 2021. In early 2022, prices of yarn in all categories crossed Rs 400 per kg.

“High yarn price is one of the main reasons for the production decline,” says MP Muthurathinam, president of Tiruppur Exporters and Manufacturers Association. “Exporters were unable to negotiate better prices with foreign buyers. So, they began to reduce production and buy yarn from mills.

Besides, domestic garment manufacturers increased the price of garments and supplied them to north Indian markets. But distributors from these markets cut back on orders, leading to a drop in production. Since, compacting, dyeing, stitching, and garment printing units are linked to manufacturing, everyone is affected by the drop in production,” he explains.

‘Hundreds of inter-district workers left Tiruppur’

Meanwhile, as yarn stocks pile up, the Tamil Nadu Spinning Mills Association asked its members to stop production from Monday. The war in Ukraine too has played its part, hindering foreign buyers from offering better prices.

Industrial consumption consumption of electricity has also fallen from a monthly average of 5.5 crore units (June-December 2021) to 4.5 crore units (January-June 2022).

A TANGEDCO official recalls that towards the end of the first pandemic lockdown there were 11,300 industrial processing units, consuming power through LT service, in the city. This rose to 12,400 in December 2021. “Power consumption should have increased proportionately but it did not. Between June 2021- June 2022, we saw a drop in consumption by one crore units in the past six months. I believe industrial units mostly associated with the garment industry in Tiruppur city have either not been operating at full scale or have remained idle.”

Harvey Exports Proprietor C Ramasamy says high yarn prices are making it difficult for garment exporters to negotiate orders. “Last year, the price of yarn was around Rs 220 per kg (30s count). But, in April and May, the price jumped to Rs 440 per kg. At this price, we cannot make garment goods. It will be a pure loss for us,” he says.

The drop in production has affected workers too. “More than 80% of garment manufacturing units fall under MSME sector. These units have employed the largest number of workers in the garment industry. Due to the yarn price crisis, these units are unable to operate. A few months ago, many units were running night shifts and double shifts for workers due to large orders. But due to low production and idle units, most of the garment units are running with single shifts. Workers mostly from poor family backgrounds feel the heat and worry about the future of the industry. Migrant workers are even more worried,” says N Sekar of AI TUC banian union in Tiruppur.

According to Sekar, export and domestic garment companies have stopped recruiting fresh migrant workers from north and north east India for the past six months. “Currently, male and female migrant workers in hostels are deployed for work. Hundreds of inter-district migrant workers from Pudukkottai, Dindigul, Madurai, and Tiruvannamalai have already left Tiruppur,” he says.

“I had employed over 40 workers in my facility, but now my facility on Dharapuram Road remains idle and I am just paying advance money to workers to retain them for future orders,” says Ramasamy. According to revenue records, there are more than 1.30 lakh labourers from other States employed in the garment industry in Tiruppur.

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