Another yarn price hike looming large

With another hike in yarn prices looming large following the sudden escalation in cotton prices over the last 10 days, the apparel manufacturers are keeping their fingers crossed expecting that the yarn prices would not shoot up disproportionately as compared to cotton.

Garment manufacturers say that they were worried because recent trends in fixation of yarn prices indicate hiking of its prices have not been carried out proportional to increase in the costs of cotton, the main raw material, on many occasions, with the prices even going up at times when cotton prices crashed.

“The price of ‘40s count’ yarn was just Rs. 218 per kg during the latter half of 2010 when Shankar-6 variety of cotton has been costing Rs. 43,000 per candy.

Whereas, the yarn price has been revised upwards on April 2 this year to peg at Rs. 224.63 a kg for ‘40s count yarn’ even when the cotton prices crashed to Rs. 35,000 per candy,” R. Girish, exporter and spokesperson of Tirupur Exporters and Manufacturers Association, told The Hindu .

However, spinning mills sector attributes rise in yarn prices this year to steep increase in overall production costs.

“It should be noted that apart from the price of raw cotton, which accounts for about 60 per cent of the yarn price, the other costs like labour charges and power charges incurred owing to use of generators during load shedding too went up significantly resulting in yarn price rise despite reduction in cotton prices on certain occasions this year,” pointed out Raja Shanmugam, partner of Alpine Spinning Mills.