New Delhi, May 8 (Agency) Facing the double whammy of spiralling raw material prices and buyers unwilling to revise prices to accommodate additional costs, garment exporters want the government to provide soft loans, stop raw cotton export and regulate export of yarns as urgent measures to help the labour-intensive industry. Highlighting the issues troubling the industry, Tirupur Exporters Association (TEA) President Raja M Shanmugham said that the key raw materials used by the garment firms have witnessed 100-150% increase in prices over the last 18 months. He said that while yarn prices have more than doubled, the increase in rates of dye stuff is to the tune of 100-150%. Packaging cost has also gone up substantially as paper manufacturers have hiked rates.
“If I could buy 1 kg of yarn 18 months back for Rs 200 then now I can buy only 400 gms of yarn for that price,” Shanmugham told UNI stating that the industry especially MSMEs are now finding it difficult to survive. Moreover, the export orders from Europe have also slowed down in the last few months due to the ongoing Russia-Ukraine war and the uncertainty it has created in most of the European countries. The TEA President whose firm Warsaw International supplies to many German clothing brands said that Ukraine war has created rough atmosphere for entire industrial chain and many buyers have during discussions said that the intake by the market over the next few months would be low. He said that government needs to infuse fresh liquidity on war footing and the way it was done during the Covid times. “Raw cotton should not be allowed to be exported.
Currently all the cottons have been procured by traders and it is not with farmers. So, at least for six months till the new crop comes, the export of cotton should be stopped,” Shanmugham said adding yarn export to rivals like Bangladesh and Vietnam should be reviewed to ensure local demand is first met. Animesh Saxena, Managing Director at Gurgaon-based clothing firm Neetee said that high raw material prices have squeezed the profit margins adding to the woes of the MSMEs in the textile and apparel business. “MSMEs are in very vulnerable situation. Besides raw material prices, logistics costs have also gone up. The clients are not ready to give increase in prices in line with the rise in input costs. It’s very tight situation,” Saxena said.