Knitwear industry in Tirupur, Tamil Nadu, known as India?s knitwear hub, that accounts for 56% of the country?s total knitwear exports, has been affected due to skyrocketing hosiery yarn prices in the last two months. The yarn prices shot up as cotton prices in the domestic market increased by 15-20%, following huge demand for Indian cotton in the overseas market including China, the world?s largest buyer of the fiber.
Around 500 spinning mills producing hosiery yarn suitable for knitwear industries are located in Palani, Tirupur, Erode, Salem, Karur, Coimbatore, Madurai, Dindugal and Vedasandur in Tamil Nadu.
Cotton required for these spinning mills are procured from the cotton production pockets like Gujarat, Maharashtra and Andhra Pradesh. In fact, knitting units in Tirupur alone use Rs 15 crore hosiery yarn every day to produce different kinds of knitwear for the export market.
PK Duraiswamy, managing director of Erode Annai Spinning Mills Pvt Ltd, said that the cotton price had increased to Rs 23,000 per 355-kg candy from Rs 20,000-21,000, within a month.
Meanwhile, the frequent power cuts in the Tirupur-belt has forced several spinning mills to use generators to achieve production. The hike in cotton prices and frequent power cuts have prompted the spinning mills to increase all grades of hosiery yarn prices by Rs 700 per 100-kg case within two months, Duraiswamy said.
Currently, the yarn prices are hovering in the range of Rs 108 per kg for 20 counts and Rs 112 per kg for 24 counts, while the price of 30 counts was fixed at Rs 121 per kg and Rs 130 per kg for 40 counts. The knitwear industry that is hit by the rising rupee has further slowed down the production due to high yarn prices and this has resulted in hosiery yarn accumulating in spinning mills, he said.
