High raw material prices bring production in textile clusters to a halt

Units in Tiruppur, Karur, Erode and Salem launch two-day strike

Textile units in Tiruppur, Karur, Erode and Salem districts stopped production on Monday as part of a two-day strike to highlight the problems they are facing due to the high prices of cotton and cotton yarn.

These units, mostly in the MSME sector, demanded immediate measures from the Union government to control the prices.

“While the cotton price has crossed ₹1 lakh a candy, the cost of cotton yarn has doubled in the last one year or so, and this is impacting knitwear exports and sales in the domestic market,” said Raja M. Shanmugham, president of the Tiruppur Exporters’ Association. More than 10,000 knitwear and allied industries did not operate in Tiruppur.

In Karur, a hub for the production of home textiles, about 600 exporting units and over 500 manufacturers for the domestic market stopped production.

M. Nachimuthu, president of the Karur Textile Manufacturer Exporters’ Association, said that though there was good demand for home textiles in the international market, the increasing price of yarn was reducing the margins for the manufacturers. The overall production cost had increased by nearly 25% for these units. Though the buyers had agreed a price hike, it did not recover the entire production cost incurred by the manufacturers. While the cotton price was shooting up, the mills were increasing the yarn price frequently, he claimed.

The fabric producers, textile processing units and exporters in Salem said they were unable to meet existing orders or compete with China, Bangladesh and Vietnam in terms of pricing.

Cloth merchants, daily and weekly textile traders, powerloom cloth manufacturers and units involved in allied activities are taking part in the two-day strike in Erode.

The protesting units called for a ban on the export of cotton and cotton yarn; bringing cotton under the Essential Commodities Act; and steps to generate clear data on cotton production and consumption.

Union Minister for Textiles Piyush Goyal has called for a meeting of all stakeholders in the cotton textile value chain in New Delhi on May 17 to discuss the issue of high raw material prices.