The abnormal rise in prices of yarn that shot up by 35 per cent in the last three months is attributed to a direct fallout of the Central government tinkering with its cotton and yarn export policy. And that is the reason why the Karur home textile manufacturers and exporters are struggling to meet orders.
Karur home textile industry fetches foreign exchange to the tune of Rs. 4,000 crore a year. Hundreds of home textile manufacturers and exporters have been affected by the steep rise in prices of yarn have upset their calculations and future plans.
Home textiles products are made from lower count yarn for which the consumption of cotton is high compared to higher count yarn. With spinning mills running short of cotton, they are inclined to produce higher count yarn which leads to huge shortfall of lower count yarn for the Karur manufacturers.
Even if it is made available, the price of lower count yarn is very prohibitive, according to president of Karur Exporters' Association, ‘Atlas’ M. Nachimuthu.
Most of the Karur home textile exporters enter into annual price contracts with their clients abroad and the sudden and steep increase in prices of yarn directly impact them. They are also struggling to meet the delivery time schedule due to shortage of required count yarn and bleeding financially to honour commitments, Mr. Nachimuthu added.
The price quotes of Karur home textile exporters are on a higher side compared to those from China, Pakistan and Bangladesh among other countries who are our major competitors. As a matter of fact, there was every possibility of customers migrating to exporters from competing countries resulting in India losing its global market share in home textile exporters.
On this account, the Central government must seriously revisit the cotton and yarn export policy that was hurting the Karur home textile exporters on a massive scale. The huge volumes of cotton exports done ignoring the demand of domestic consumers such as spinning mills who cater to the requirements of specific categories such as home textile exporters must be immediately done away with. And the needs of domestic spinning mills should be looked into as top priorities.