With the value adding textile segments appealing to the Government to ban cotton yarn exports, Southern India Mills' Association has said that cotton yarn is available in surplus in the domestic market.
The current issue regarding cotton yarn is price and not availability. “The high volatility in the raw cotton price due to various negative policies announced by the government, particularly in the recent months, has been the root cause for the current turmoil in the cotton textile industry,” J. Thulasidharan, chairman of the association, has said in a release.
Cotton yarn (hosiery) prices went up from Rs. 195 a kg in September to Rs. 203 on October 1. The prices increased to Rs. 210 a kg on October 20 and to Rs. 217 a kg on October 26. On November 1, the prices shot up to Rs. 224 a kg. The Tirupur Exporters' Association has appealed to the Government to ban cotton yarn exports immediately.
Mr. Thulasidharan appealed to the downstream value adding segments to join hands with the spinning sector and appeal to the Government to expedite announcement of a fibre policy. Yarn prices for 40s count combed hosiery yarn had increased by 15 per cent as against 50 per cent increase in cotton prices.
Garment and made up segments should be in a position to absorb the increase in yarn prices, which accounted for only 30 to 35 per cent of the cost of production, he said. The downstream sectors were unable to pass on the increase in yarn price fully to the end users because of the abnormal increase in various other costs of production. The down stream sectors should invest in automation and modern technology and adopt best practices to sustain their competitiveness.
Further, the problems faced by the textile industry would be minimised if the Government had deferred cotton exports to January, 2011.
Production of cotton yarn was increasing since 2005-2006. Supply of hosiery yarn in the domestic market had increased from 74.8 million kg in April 2010 to 82.3 million kg in August 2010. Supply of weaving yarn had also increased. Hence, surplus yarn was available in the market for domestic consumption, he said.
