Hike in cotton yarn prices puts knitwear traders in tight spot

Yet another increase in prices of cotton yarn by spinning mills that came into force on May 30 has put the knitwear manufacturers in Tirupur knitwear cluster in a tight spot.

The steep escalation of yarn prices in the last few months without any advance notice makes increasingly difficult for apparel producers to fix prices of end products.

The latest increase of Rs. 10 a kg of 40s count yarn, which is the benchmark category, shoot up its price from Rs. 177.09 a kg on May 1 to Rs. 202.09 a kg. Industry sources pointed out that the price of 40s count yarn had risen by about 40 per cent since August last. Sources in the spinning mills cited the rise in cotton prices as the reason for increasing the yarn prices.

However, knitwear manufacturers refuted their claims, pointing out that there was a huge disparity in the rise of cotton prices and frequent increase in yarn prices.

“This level of increase in yarn prices cannot be justified at all considering that the spot price of Shankar-6, the most used variety of cotton, has gone up by only 7.22 per cent till now,” Tirupur Exporters Association president A Sakthivel said.

The exporters are now looking to the Central government to intervene and help the apparels made from Tirupur cluster remain price-competitive in foreign markets.