TIRUPPUR: The Tirupur Yarn Manufacturers Association has appealed to garment units in the region to lend their support in advocating for a revised role for the Cotton Corporation of India (CCI). The appeal comes amidst growing concerns over the stability of cotton and yarn prices, which are significantly impacting the textile value chain in India’s prominent knitwear hub.
According to details received by The Chenab Times, the yarn manufacturers are seeking government intervention to ensure that the CCI not only procures cotton from farmers at the Minimum Support Price but also strategically maintains buffer stocks. This, they believe, will be crucial in ensuring stable raw material prices for the entire textile industry.
The association highlighted that many garment buyers and international brands currently nominate specific ginners for cotton procurement. This practice, they argue, restricts spinning mills’ access to credit and contributes to working capital imbalances across the value chain. The current scenario, where yarn prices are heavily influenced by cotton prices – which constitute 65% to 70% of manufacturing costs – has led to significant financial pressures on spinning units.
International cotton prices have seen fluctuations, softening from 91.55 cents a pound to 82.17 cents a pound, consequently leading to a marginal decline in yarn prices from Rs. 384 a kg to Rs. 379 a kg. However, the underlying issue of price volatility and its impact on operational viability remains a significant concern.
The Tirupur Yarn Manufacturers Association also pointed out that over 70% of spinning mills have struggled to modernize in recent years due to sluggish yarn exports. This stagnation, coupled with the financial strain, necessitates a more supportive ecosystem.
In a memorandum submitted to the Apparel Export Promotion Council (AEPC) and the Tirupur Exporters Association (TEA), the manufacturers emphasized the need for a more balanced payment mechanism. They are seeking cooperation from the garment sector to ensure timely payments within mutually agreed credit terms, thereby alleviating the prevailing financial pressures on the spinning sector.
Furthermore, the association is advocating for the complete removal of the 11% import duty on cotton. They believe this measure, combined with a modified role for the CCI, will enhance the competitiveness of the Indian textile industry. The call for modifying the CCI’s role stems from the understanding that its current operations may not be sufficiently addressing the needs of price stabilization for downstream industries.
The textile industry in Tiruppur, often referred to as India’s ‘Dollar Town,’ is a critical export hub, contributing significantly to the country’s foreign exchange earnings. The sector, however, has faced multiple challenges recently, including the impact of international trade conflicts and geopolitical disruptions affecting freight costs and raw material availability. While the industry has shown resilience, as evidenced by its recovery following previous tariff shocks, the persistent volatility in cotton and yarn prices poses an ongoing threat to its stability and growth prospects.
The appeal to garment units underscores the interconnectedness of the textile value chain, where the well-being of spinning mills is directly linked to the health of the garment manufacturing sector. Industry stakeholders are hopeful that a collaborative approach will lead to policy recommendations that can ensure a more stable and predictable environment for all players.
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The Chenab Times News Desk
