Textile units in Tiruppur, Erode, and Karur districts of Tamil Nadu on Monday launched a two-day strike demanding the Union Government’s intervention in regulating the prices of yarn and cotton, which, they say, have “sky-rocketed” in the past 18 months.
Thousands of units in the knitwear hub of Tiruppur, the textile hub of Erode, and Karur downed their shutters on Monday and will continue to do so on Tuesday as well, leading to losses in revenue. The industry has been hit by ever-increasing yarn and cotton prices for the past two years and had made numerous representations to the Union Government.
Insiders say the prices of yarn and cotton per candy have more than doubled in the past 18 months. A kilo of yarn which cost Rs 200 in 2020 is now sold for Rs 440. Likewise, the price of cotton per candy was Rs 40,000 in 2020 and now it has increased to over Rs 1 lakh. In April, it was Rs 95,000, the insiders added.
Textile units in the three districts are dependent on yarn and cotton for manufacturing their products. Tiruppur Exporters’ Association (TEA) has demanded a specific scheme for MSMEs like ECLGS to bailout the knitwear garment sector reeling under liquidity crisis and finding it difficult to service their loan to banks and sustain in the business. It said 95% of the garment units are classified as MSMEs.
“We have been hit by the price hike for the past 18 to 19 months. Our first demand is to impose a ban on the export of raw cotton. Since the majority of the textile units are classified as MSMEs, these people are unable to sustain their businesses. The government will have to step in and take corrective measures,” Raja M Shanmugham, President, TEA, told DH.
He said banning the exports of raw cotton will send a message to the “hoarders” who will be forced to bring the materials that are in stock. “This will ensure free flow of cotton in the market. We also demand that the government delist cotton from the commodities list,” he said.
Ravi Sam, Chairman of The Southern India Mills’ Association (SIMA), said the rising cotton prices will lead to an increase in the price of finished products like vests. “Our festive season begins only in July. But the prices of yarn and cotton are at an all-time high and there is no way for manufacturers other than to increase the price. This has led to an increase in the price of vests by at least 20-30%,” he added.
Exporters and textile unit owners have been complaining that the unprecedented increase in the prices of raw materials like cotton and yarn coupled with the hike in prices of accessories have impacted the MSMEs mainly on the liquidity front forcing them to operate on a “Hand to Mouth” basis for the past 15 months.