The Hindu Business Line : `Cotton yarn price increase may hurt textile exports'

The cascading effect of raw cotton and cotton yarn price increases seen in the recent weeks will have adverse effect on the country's textile exports, especially the home textile goods made from handloom sector, the Karur-based textile exporters fear.

"The European market is just slowly resuming after summer vacation (July-August) and has commenced placing commercial orders/sampling enquiries only now. At this stage, spurt in cotton yarn prices will dampen our trade as the prospective exporters are, along with sampling, bound to commit their export prices as well," said Mr D. Senthil Kumar, Managing Partner of A.D. Textiles, a home textile exporting house in Karur.

Come September, most home textile exporters would be gearing up for meeting the following Spring/Autumn shipment.

The Karur exporter said that the prices of particular yarn counts widely used by the home textile manufacturers, say, 2/20s or 10s counts, began to fluctuate and between mid-Aug and the first week of this month, the prices showed an increase of 7-17 per cent. The yarn merchants blamed the sharp rise on the raw cotton prices.

Unlike the yarn trade, the exporters engaged in final product manufacture could not jack up their rates as their buyers would not absorb any increase in prices.

"When Chinese home textile exporters coming out with their offer price cheaper by at least 40 per cent compared to our prices, it is increasingly becoming difficult for us to remain price competitive," he added.

The home textile exporters are also aggrieved on what they call the reluctance on the part of the yarn trade to pass on the benefit accrued out of the abolition of the 2 per cent sales tax on hank yarn extended in the recent Tamil Nadu Budget.

With pressure mounting, the Karur Textile Manufacturer-Exporters Association has called upon the member-units to refrain from making any cotton yarn purchases to stem the rising prices.

The association in its communication had stated that there is no rationale behind the current strident price increase seen in yarn market, especially when it is reported that the country's cotton crop is comfortably placed to give another bumper production.

More Stories on : Textiles | Exports & Imports | Cotton | Tamil Nadu

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