Textile mills reduced yarn price by ₹40 a kg in Tiruppur market on Friday bringing relief to the knitwear industry.
President of Tiruppur Exporters’ Association Raja Shanmugham said the mills are also offering discounts. This is because of low offtake for yarn. In July and August , the market is usually dull in Tiruppur. Production is mostly for winter clothing and it is relatively lesser volume compared to demand for summer season. Since mills want to off load the yarn stocks prices have dropped. “The prices have dropped after 18 months. Though this will bring relief to the garment manufacturers, we do not know at what level the prices will stabilise,” he said.
Brands will gear up for the next season and the lower yarn prices will help the exporters. With rupee depreciating too, garment exporters look forward to revival of orders, he added.
For the domestic manufactuers the yarn price reduction has come late, said one of the industry sources. Even last month the manufacturers had sought reduction in yarn prices. But, mills have reduced now when most of the hosiery manufacturers have supplied goods for Deepavali orders.
The textile mills have almost 15 days to one month stock of both, yarn and cotton. This is because of high raw material prices that prevailed earlier. There was hardly any movement of yarn in June though most of the mills had reduced production last month. “Many mills are also worried as they ordered cotton imports at higher prices. The cotton will get delivered now when the domestic prices are declining,” said a textile mill source in Coimbatore.
Yet, the impact now may not be as bad as it was about 10 years ago as many of the mills have lesser stocks because of price volatility, the source added.
