In order not to get adversely impacted, a section of the industry has urged the government to intervene and rein in the galloping prices. In this direction, they want the government to urgently call meeting of all garment associations and exporters to gauge the situation.
Interestingly, given the volatile price trends, exporters in Tirupur have refrained themselves from quoting any prices for future supplies. They decide on prices on a day-to-day basis, sources said.
Premal Udani, president, Clothing Manufacturers Association of India (CMAI), said, We want the government to urgently call for a meeting of all the major garment associations to take a stalk of the situation. Also, it is necessary that the government temporarily stops raw-cotton exports so that prices in the domestic market are stabilised. According to Mr Udani, the governments intervention is necessary as its role did help in softening prices of steel earlier. In addition, it will be better if the government announced some export-promotion schemes to boost exports, he added.
Garment exports to the US have slumped by 11 per cent. Given the high- cotton prices, exports are said to be not a paying proposition and have crawled a mere 4.5 per cent during the six-month period to September 2003.
What is more, the per unit realisation in apparel export too is seen to decline by around 10-15 per cent from the previous levels which are rather high in an extremenly competitive market.
Export of garments to quota countries during April-September in 2003-04 has amounted to Rs 10,032.76 crore, a marginal increase from around Rs 9,586.96 crore from the previous year.
According to Premal Udani, this is a unique situation for the local exporters, for despite sufficient availability of cotton this year, rising prices have forced exporters to slowdown bookings from overseas importers. September-October is considered to be the main booking month for the US and other EU countries, as importers place their orders for summer deliveries in March, he said.