India’s readymade garment exporters have sought a ban on cotton exports as soaring cotton and yarn prices are causing severe liquidity crisis, making it difficult for them to deliver shipments to foreign buyers on time. Cotton prices have grown 40 per cent, and are currently at an 11-year high due to a demand-supply mismatch. The price of a single cotton candy has surged past Rs 100,000 causing a severe liquidity crisis for exporters.

The increase has affected medium and small enterprises (MSMEs) the most as they form almost 80 per cent of production base, says Lalit Thukral, President, Noida Apparel Export Cluster. Cheap imports by Bangladesh, Vietnam and Thailand are adding to the threat of India’s cotton sector, making ban on exports a necessity, adds Thukral. Raja M Shanmugham, President, Tiruppur Exporters’ Association highlights, around 18 months ago, knitwear units could buy one kg yarn for Rs 200 whereas now the same money can buy only 400 gm of yarn. The Tiruppur garment-export cluster annually exports Rs 35,000 crore worth knitwear garments. Exporters in the cluster believe they would not be able to survive if the problem is not addressed immediately.