Apparel manufacturers of Punjab are feeling the pinch of recent increase in cotton yarn prices that has negated the positive growth in exports witnessed during the last few months.
Cotton yarn prices have gone up by over 40% in the last 45 days from R45,000 per tonne to R60,000 per tonne allegedly due to hoarding by speculators and delay in imposing a cap on cotton exports.
Vinod K Thapar, president, Knitwear Club, said, ?There had been an exorbitant increase in the prices of yarn. The rise in prices by monopolising houses creates uncertainty in the market and negates the rise in exports witnessed since December last.?
Thapar said that ?the manufacturers would find it difficult to sell their products. They will have no option but to raise prices to absorb the impact of soaring cotton costs.?
According to manufacturers ?the aftermath of rise in cotton yarn prices would be an increase in use of synthetic linings and polyester in apparels as manufacturers would have to adopt these measures to cut costs.?
The rise in cotton yarn prices has come at a time when apparel manufacturers had some reason to cheer up as apparel sector almost after seven months of continuous decline in exports from May to November last year had seen revival recently as exports rose during December, 2010 and January, 2011.
Premal Udani, chairman, AEPC, said, ?This increase is due to growth posted in AEPC?s largest exporting partner, the US markets.? Apparel exports to the US registered a growth of 10% during the period January 2010 to November 2010 against the corresponding period of January 2009 to November 2009.
Apparel exports from India to US markets during January to November 2010 stood at $2903 million, as against exports of $2636.90 million during the same period of 2009.