Since November 2021, the price of cotton yarn has gone up. It is finally dropping now; however, the knitwear capital Tirupur has not recovered, and even now production remains at 50 percent. Both the domestic market and export garment production have had a severe impact due to this. Besides, the huge workforce that relies on the textile industry remains unemployed.
Production has stalled due to a dip in the buying power of people in domestic as well as foreign markets. The garments already manufactured and exported have remained unsold, said, exporters. Besides, the previous season’s orders were directed to other countries with cheaper tariffs due to which Tirupur garment units were shut.
Tirupur has more than 10,000 garment manufacturing units and around six lakh workers depend on these for employment.
According to garment manufacturers, in the past too, knitwear sales have been affected, impacting production and employment but this time it has
reached a critical level. According to sources, the units here are not receiving orders as they are unable to negotiate with export traders and reach the common and fairground.
Muthu Rathinam, President, of Tirupur Exporters and Manufacturers Association (TEAMA), said that their competitors’ markets such as Bangladesh, Vietnam, Ethiopia, and China received orders in the current season because the yarn price was high in India and they could not quote convenient prices.
He added that even big home-grown players such as Amul, Dixcy, and Lux, which manufacture garments of around Rs 10,000 crores each year, are now stocked with pre-made clothes. The price of one kilo cotton year was Rs 220 about 18 months ago and it increased to Rs 460 in May this year, sources stated. Thus, the industry in Tirupur is moving to synthetic fiber such as polyester and rayon as it is unable to buy cotton at the mentioned price.
The scenario though is good for large export companies as they are getting orders while the small and micro exporters are facing the brunt. Only 10% are corporates, while 90% of the units are micro, small, and medium enterprises (MSME), in Tirupur.
The successive government policies have had a great impact on the industry and crushed the domestic market while rendering labour unemployed.
Hence TEAMA is now demanding intervention by the government to control the prices of cotton yarn and also make cotton an essential commodity.
