Category: General
Country: India
Shine Jacob | Chennai Last Updated at June 19, 2022 16:29 IST
After seeing a rise of 41 per cent in India’s textiles and apparel exports to $44.4 billion in 2021-22, the increase in cotton and yarn prices is leading to a demand drop of at least 10 per cent so far during the current financial year, say industry sources.
According to Wazir Textile Index, almost all the top companies in the sector – including Welspun, Vardhman, Arvind, Trident, KPR Mills, Indo Count, RSWM, Filatex, Nahar Spg, and Indorama – saw an increase in sales during the last financial year. Industry bodies say that this demand has declined during the first two months of the financial year.
“Last year’s rise in exports was owing to pent-up demand in the US and Europe and China Plus One Policy followed by several countries. Factories in India were also not much affected by the pandemic last year. Even the unlisted companies have performed well. This year, demand has slowed down as raw material prices are too high,” said Narendra Goenka, chairman of the Apparel Export Promotion Council (AEPC). The industry body is of the view that the sector is seeing a demand drop of at least 10 per cent during the first two months of the fiscal, compared to the same time in 2021-22.
Among the companies, Welspun saw a 13 per cent increase in sales, Vardhman around 60 per cent, Arvind around 65 per cent, and Trident nearly 54 per cent rise in sales in 2021-22, compared to the pandemic-hit 2020-21. During the last financial year, the majority of the rise came from the United States, which contributed to 27 per cent of India's textiles and apparel exports, followed by 18 per cent by the European Union, 12 per cent by Bangladesh, and 6 per cent by UAE.
The price of cotton in India had more than doubled to cross Rs 100,000 mark per candy during the current financial year, leading to an increase in yarn prices too. Industry bodies had approached the government seeking a ban on the futures trading of cotton and restrictions on cotton and yarn exports.
“The crisis due to the rise in raw material prices is evident this year and hence, it may not be the same as last year. Those who had large stocks of cotton or yarn taken at old rates will still benefit from this current rise,” said Sanjay Kumar Jain of Delhi-based TT Ltd, which has its main manufacturing unit at Tiruppur in Tamil Nadu.
AEPC also blamed the Ukraine crisis that resulted in a rise in energy prices as one of the major reasons for the dip in demand from the US and Europe this year. According to the media reports, new garment companies from countries like the Czech Republic, Egypt, Greece, Jordan, Mexico, Spain, Turkey, Panama, and South Africa have started negotiating with the Indian companies following the lockdown in China. However, industry players say such orders are minimal compared to last year.
Courtesy: https://www.business-standard.com/article/companies/raw-material-price-hike-pinch-india-s-textiles-apparel-exports-in-2022-23-122061900443_1.html
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