Apparel / Textiles & Accessories

Although the central government of India has taken measures to abolish import tariffs, textile mills across India are completely at a loss in the face of rising raw cotton and cotton yarn prices.

At present, the domestic cotton price in India is still hovering at rs. 10000-15000 / Kande. Due to the continuous rise of raw cotton and cotton yarn prices, the textile mills in Gujarat, India, have reduced production by nearly half, and are facing closure and shutdown. SOLIN parik, chairman of Gujarat Spinning Association, said that in the past three weeks, yarn manufacturers have not received new orders due to unprecedented prices. If prices do not drop, most yarn mills will be forced to stop production. Now, many textile mills have suffered losses in order to fulfill their customers' commitments. There are nearly 120 textile mills in Gujarat, and the startup rate is slightly higher than 50%. The textile industry has no choice but to hope for the best and prepare for the worst.

Patrick, the founder of paspatico spinning, said that because weavers and international buyers are unwilling to pay higher cotton prices, most spinning mills are unable to increase the prices of end products according to the increase of cotton prices. Garment manufacturers in Gubang are also facing a 45% reduction in production. The demand of garment manufacturers, one of the three major garment clusters in Ahmedabad, is low. Vijay purohit, chairman of Gujarat Garment Manufacturers Association, said that due to the soaring price of fabrics, the operation of garment manufacturers is extremely difficult. Most garment manufacturers have not recovered from the adverse impact of the epidemic, and now they are facing another huge challenge is the price of cotton.

Among the more than 25000 garment manufacturers in Gujarat, more than 90% are small, medium and micro enterprises, employing more than 2million people. There are nearly 15000 garment manufacturers in Ahmedabad alone. Some companies have partnerships with global brands and export clothing around the world. Purohit said that if cotton prices do not fall, many factories will close within a few months, leading to mass unemployment.

ChinTan Tucker, President of Weill Textile Group, said that it is necessary to ban the export of cotton. Welspun's two plants in Gujarat currently have a capacity of 60%, and its international buyers are unwilling to absorb the rise in raw material prices. In some cases, in order to fulfill previous commitments, the factory can only operate at a loss.

Chiripar group, headquartered in Ahmedabad, said that chiripar group has reduced its production by as much as 20%. Compared with other textile enterprises, the company manages the price rise slightly better due to its diversified business portfolio. However, considering that cotton prices are the most important raw material in most manufactured goods, the inflation of cotton prices is a cause for concern.

Narendra gonka, chairman of the Indian Garment Export Promotion Committee (AEPC), said on Thursday that the sharp increase in the price of cotton and cotton yarn may affect the country's garment export target of US $19-20billion in the current fiscal year. In the past 18 months, prices have risen by about 125 to 130 per cent, one of the reasons being the unrestricted export of cotton and cotton yarn.

In fiscal year 2021/22, the export volume of Indian clothing is expected to be US $16billion, while the target is US $19billion to US $20billion. Due to rising prices, the industry is facing great challenges in terms of raw materials. AEPC chairman said that if the price rise does not stop, global customers will start to look for purchasing options other than India, and about 60%-70% of cotton yarn and cotton yarn will flow to competitor countries, such as Bangladesh and Vietnam.

At present, the Indian garment export promotion committee is taking measures, such as organizing meetings between buyers and sellers around the world to promote exports. The free trade agreements signed by India with the United Arab Emirates and Australia have promoted the substantial growth of Indian garment exports. Solving the problem of raw materials will help to make full use of these agreements.