The unprecedented increase in cotton price has made knitwear production industries in Tiruppur to raise the price of their products to 10% from June 15. Earlier, the exporters’ association from Tiruppur declared the rate of export had dipped to ₹24,000 crore last year, which was about ₹26,000 crore in the previous year allegedly because of demonetisation and the Goods and Service Tax (GST).
Due to the export of textile-based products like knitwear, apparels and other fabric items, Tiruppur got the tag of ‘Dollar city of Tamil Nadu’. The textile units are operating with a capacity of 80 lakh spindles every year. But the recent hike in cotton price has put producers in distress.
V Ponnusamy, general secretary, South Indian knitwear manufacturers association, said, “As cotton price reached ₹48,000 per candy (355kg) on Monday, we decided to increase our product’s price to 10%. Unless the Cotton Corporation tried to stock the cotton for domestic needs, the price would further increase. Already the mill owners had increased the price of yarn in terms of ₹15 per kg.”
He said the annual requirement of cotton for Tiruppur and its adjacent districts is one and half crore bale (one bale is equal to 170kg).
Prabhu Damodaran, coordinator, Indian Texpreneurs Federation based in Coimbatore, said, “Last November, we paid ₹38,500 per cotton candy (355kg). We purchased the same quantity for ₹46,500 last week. As there is no adequate quantity of cotton available in Tamil Nadu, we are heading to Karnataka, Telangana, Maharashtra and Gujarat to purchase it. So, we have to spend ₹1,500 per cotton candy for transportation. If we are achieving a turnover of ₹100 crore, it means we are spending around 65% to 70% for raw materials.”
{{/usCountry}}Prabhu Damodaran, coordinator, Indian Texpreneurs Federation based in Coimbatore, said, “Last November, we paid ₹38,500 per cotton candy (355kg). We purchased the same quantity for ₹46,500 last week. As there is no adequate quantity of cotton available in Tamil Nadu, we are heading to Karnataka, Telangana, Maharashtra and Gujarat to purchase it. So, we have to spend ₹1,500 per cotton candy for transportation. If we are achieving a turnover of ₹100 crore, it means we are spending around 65% to 70% for raw materials.”
{{/usCountry}}He further pointed out that the reason for the sudden rise is highly connected with the international market. “As China avoided purchasing cotton outside their nation, the cotton price in New York (in United States) has increased, which is reflecting in our market,” Prabhu added.