A combination of factors — US ban on Chinese cotton, a sudden surge in orders for garments, additional stocking up, increased exports to Tirupur’s competitors including Vietnam and Bangladesh — have resulted in yarn shortage for garments exporters.
The situation is so grim for exporters that Tirupur Exporters Association (TEA) has alleged that mills were withholding yarn supplies impacting the export business.The current decision of mills will certainly impact the garment units, exports will largely be affected and more number of workers will incur job losses, said Raja M Shanmugham, President, TEA.
Mills have rejected that they were channelizing yarn for exports. Due to supply disruptions, companies across the value chain, both in exports and domestic markets in the textile sector, started building inventory of apparels, home textiles , yarn and fabrics to manage the business continuity. This sudden inventory build up is causing shortages, said Prabhu Dhamodharan, convenor, Indian Texpreneurs Federation (ITF).
Yarn prices are rising. Over the past three months, a kilogram of cotton yarn has risen from Rs 205 to Rs 223.
