Raja M Shanmugham, President said the cotton yarn price increase by rs. 20 per kg in this month has literally pushed the knitwear garment export sector into a difficult situation and to sustain in the competitive global environment.
While taking stock of the situation, he said the beleaguered knitwear export sector has been passing through a challenging business environment further to implementation of GST and this could be apparently witnessed from the continuous declining of knitwear exports month on month basis since October 2017, after three months transition period is over and the declining of exports for the second half yearly period of 2017-18 was 21 per cent. The most worrying factor is that the negative trend in exports growth is continuing in the current financial year also and the average decline of knitwear exports in the month of April and May was 34 per cent.
Raja M Shanmugham stated that the knitwear sector is now only booking the orders, business have now started to look ahead and poised to bring back the industry from brink after prolonged one year period lull and at this point of time, the increase in yarn prices would derail the industry and the aftermath effect would be severe as not only the knitwear garment sector will get affected but also there will be a boomerang effect on the textile mills. Considering this crucial concern and the overall benefit of textile industry, he appealed to the Textile Mills not to increase the cotton yarn prices and also not to stop cotton yarn supply.
On the increasing of cotton yarn prices, Raja M Shanmugham said, he has already met the Hon’ble Union Minister of Textiles Smriti Irani and requested to mandate the cotton corporation of India to ensure the availability of sufficient quantity with desired quality cotton to protect the interest of farmers, textile industry and also employment. The point of contention is that the impact of increase in cotton prices has made the textile mills to increase the yarn prices which ultimately affect the downstream value added sectors like weaving, knitting, garmenting, made ups etc., particularly value added exporters as they could not revise the price upwards immediately as the prices were fixed more than three to five months ago.
He further mentioned that he also met K Phanindra Reddy IAS., Principal Secretary to Government, Ministry of Handloom and Textiles, Government of Tamil Nadu, yesterday, discussed cotton crisis arisen further to wrong policies of CCI and emphasised the need to cut down the escalating cotton prices. He added that the Principal Secretary has assured to take up the issue with Central Government through Chief Minister of Tamil Nadu. Shanmugham once again appealed to the textile mills to protect knitwear garment sector and employment by not increasing the prices and also ensuring the continuous supply of yarn.