TIRUPUR: Garment exporters, who were expecting prices to reduce after the Union government cut duty on imports, suffered a rude shock as yarn price went up by rupees 40 per kilogram across all categories on Monday. To condemn the price hike, garment unit owners have announced a strike from May 16 to 21. A resolution to this effect was passed by the federation of garment unit owners in which representatives of all associations and labour unions participated.
President of the federation of garment unit owners association MP Muthurathinam said, “Mills increased prices by `50 per kilogram in November last as a result of which all kinds of yarn was sold at `350 per kilogram. The Union government removed import duty and we were expecting the prices to fall. But mills have increased price by more than `40 which is a shocker.”
Mohan Shankar, proprietor of AK fashion garments, said, “Most of the garment units in Tiruppur belong to the MSME sector. They are dependent on other units for processing such as dyeing, printing, knitting, and embroidery. But if the price of the yarn increases it directly affects all segments of the industry. Besides, business deals are made based on the price of yarn. If the price increases every month, it will be difficult to renegotiate with foreign buyers. This erodes the profit margin for exporters.”
Tiruppur Exporters Association (TEA) president Raja N Shanmugam appealed to the Union government to ban cotton and yarn exports immediately till the time prices stabilize.
Tamil Nadu Spinning Mills Association (TNSMA) - Special Adviser Dr K Venkatachalam said, “Cotton is hoarded by traders in North India which is creating scarcity. So, mills are increasing prices. The removal of import duty seems to have had no effect on the traders. When the union government announced the duty cut, there was an immediate change in cotton candy price, it dropped to `96,000 and stabilized at Rs 98,000 for some days. But, the minute the cotton availability started to reduce, the price of candy began to rise. The current price of cotton candy is around `1,02,000.”