Texprocil News1 - Handloom Export Promotion Council
Texprocil News1 - Handloom Export Promotion Council
Texprocil News1 - Handloom Export Promotion Council
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News Clippings<br />
Textile Ministry urged to allow duty free import of yarn<br />
Knitwear exporters have blamed yarn manufacturers of hoarding stock and using<br />
the present situation to their advantage.<br />
Perturbed with the turn of event since the beginning of March, exporters in this<br />
knitwear hub said “yarn manufacturers have stopped delivery since March 5,<br />
albeit unofficially, with a view to hoard supply and create artificial demand. This<br />
is affecting our production schedule, particularly because the orders have started<br />
to flow in since January. There is also an abnormal increase in the rate of yarn<br />
and the mill sector is not prepared to come to the table for talks.”<br />
Recapping the scenario, an exporter explained: “Cotton was ruling at Rs 38,500<br />
a candy in October 2011. The 40s count yarn was then quoting Rs 211 a kg and<br />
the rate was maintained around that level up to February.<br />
On March 1 this year, cotton prices fell from the October 2011 level to Rs 37,500<br />
a candy. Yarn (40s count) on the other hand rose to Rs 235 a kg. There was a<br />
marginal increase in the price of the cotton on April 1 to Rs 38,800/candy, by<br />
which time, the yarn rate shot to Rs 248/kg.<br />
If you compare the Oct 2011 cotton price with the April1 price, the increase is just<br />
Rs 300 a quintal. Yarn rate on the other hand has risen by Rs 36. This is an<br />
abnormal increase,” the source said and pointed out that the Government had<br />
allowed duty free import of cotton in the last six-seven months.<br />
“The mill sector has imported nearly 21 lakh bales of cotton – duty free, at rates<br />
lower compared with the domestic rate,” allege exporters.<br />
Unhealthy competition<br />
Calling this an unhealthy competition and one that would hit – both the mill<br />
sector and the downstream garment sector hard, Tirupur <strong>Export</strong>ers’ Association<br />
President A. Sakthivel said that the association has sought the intervention of the<br />
Textile Ministry in this regard.<br />
“We are unable to renegotiate the price with the buyer, as the contracts have<br />
been finalised. How can we manage when the yarn price shoots up from Rs 211 to<br />
Rs 248 and yarn deliveries stopped abruptly?’ he asked.<br />
Stating that the sector was prepared for some increase, say up to Rs 225-227/kg<br />
of yarn, he said, “We can actually resolve this issue if only the mill sector is<br />
prepared to talk to us. The situation is affecting not just the knitwear exporters<br />
but the powerloom and made-up sectors as well,” he added.<br />
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