The spiralling cotton prices has hit the MSME-dominated home textile exporters who are staring at a bleak future and potential default on orders already received.

Situation presently is extremely precarious with the value chain segment not only losing business but also the market share in countries such as US.

Several MSME units are now heading for closure as they are unable to operate after the unprecedented rise in cotton yarn prices and this will result in job losses, the Made-Ups Exporters Forum said.

Govt action

The Government has been monitoring the situation and during the last stake holders meeting had said that it will withdraw benefits on cotton yarn export and impose duties on export of raw material, if the supply chain does not ensure raw material at lower price for the value chain participants, it added.

However, raw material prices have not fallen and the government may have to take corrective measures, said the Forum.

Demand for value added products

Amit Ruparelia, Convener, Made-Ups Exporters Forum said post the second wave of pandemic there was a good all-around demand for value added products such as home textiles, apparels and the sector was fully geared up to meet the demand.

However, during the same period the millers started increasing cotton yarn prices even though the raw cotton prices were stable. At a later stage the cotton prices too rose tremendously affecting the business of entire value chain segment, he said.

Earlier, the Government had extended support to the industry with several measures including credit guarantee scheme, loan restructuring measures, moratorium, deferment of interest payments, Emergency Credit Line Guarantee Scheme and Credit Guarantee Fund Trust for Micro and Small Enterprises to moderate the impact of Covid pandemic.

Published on May 24, 2022