COIMBATORE/CHENNAI: The textile industry in the State, which is reeling from a steep rise in raw material price, is feeling the pinch of the Ukraine-Russia war as exports have dropped significantly. Tiruppur, one of the biggest textile clusters in the country, records monthly turnover of Rs 3,000 crore on an average. But garment manufacturers and exporters say exports dropped by almost 20 per cent to 25 per cent in the last one month. Almost 60 per cent of Tiruppur’s export business is with the European Union (EU) and the UK, and the war has a cascading effect as rising oil prices has put Europe under stress.
Addressing media persons on Tuesday, Raja M Shanmugam, president, Tiruppur Exporters’ Association (TEA) said the price of cotton candy increased by Rs 15,000 from Rs 80,000 in a month, which has affected production. “Almost every major European brand imports from Tiruppur and have businesses across Russia and Ukraine. Due to the war, sale is affected in these two countries and Europe. European brands have reduced their export orders by almost 20 %,” he said.
T Rajkumar, chairman, Confederation of Indian Textile Industry (CITI), “The price of cotton candy was Rs 44,000 in November last, and has been rising at an average of Rs 1000 - 3000 a day. The steep increase in cotton price and its impact on prices of yarns and fabrics is severely impacting the growth of the cotton textile value chain. Also, there is no reliable data available regarding the stock maintained by the kapas traders, ginners and cotton traders. In the case of spinning mills, only around 40% of the mills provide data to the office of the Textile Commissioner. Therefore, traders are hoarding cotton and manipulating price on a daily basis taking advantage of futures trading in MCX and NCDEX.”
Ravi Sam, chairman, The Southern India Mills’ Association (SIMA) said, “Spinning mills currently have 40-days stock (41 lakh bales) as against 3 to 6 months’ stock held earlier. Over 90% of the cotton arrives in the market between December and March. But only 240 lakh bales arrived so far as against 320 lakh bales that should have been available.”
Alleging that the 11% import duty has emboldened traders to hoard cotton in the name of farmers, he said the Union government must withdraw the duty, which would bring the price down. Further, the industry representatives urged the government to announce duty-free import of 40 lakh bales to stabilise price and help the industry sustain its export performance. Also, they appealed to the government to make declaration of stock mandatory to curb hoarding.
Lifeline across seas
Almost 60 per cent of Tiruppur’s export business is with the European Union and the United Kingdom