Cotton Exports: Readymade garment exporters need India to ban cotton exports

India’s readymade garment exporters need a ban on cotton exports, saying they’re going through a extreme liquidity disaster due to hovering cotton and yarn costs, which is making it tough for them to ship shipments to their international patrons on time.

Some international patrons have sought as much as a 30% low cost if items are delayed over 15 days in time or requested for air transport at their very own price, which might wipe out income for sellers, trade sources informed ET.

The trade needs a ban on cotton exports from India to verify the rising costs. India had on Friday banned wheat exports following a pointy rally in native costs.

Textiles minister Piyush Goyal has referred to as a gathering on Could 17 to debate the rising costs of cotton and yarn. The trade will counsel a ban on exports to tide over the disaster.

Cotton costs have gained 40% in 2022 and at are an 11-year excessive as a consequence of a demand-supply mismatch. That is hurting all the cotton worth chain together with the yarn and cotton garment producers.

The value of a sweet (335 kg) cotton has breached the Rs 1,00,000 mark in latest weeks, locking up funds in uncooked materials that has created a liquidity disaster.

“Worst affected are the medium and small enterprises (MSME), which represent greater than 80% of the manufacturing base,” Lalit Thukral, President, Noida Attire Export Cluster mentioned.

“Supply of clothes to the international patrons is being delayed.”

Thukral mentioned nations like Bangladesh, Vietnam, and Thailand amongst others are importing low-cost cotton from India and posing fierce competitors to India within the world clothes market, making a case for a ban on exports.

India’s cotton exports rose to $9.9 billion in April-Feb FY22 in contrast with $6.3 billion in full FY21. In April 2022 exports have been up 57.6% to $52.5 million from a 12 months in the past.

Round 18 months in the past, the knitwear models may purchase one kilogram of yarn for Rs 200 whereas now the identical cash should purchase solely 400 gm of yarn, mentioned Raja M Shanmugam, President, Tirupur Exporters’ Affiliation (TEA).

The affiliation has additionally written to banks to hunt assist to tide over the monetary disaster confronted by the knitwear exporters.

The Tirupur garment-export cluster yearly exports Rs 35,000 crore value of knitwear clothes. Knitwear exporters really feel they’d discover the going tough if the issue shouldn’t be addressed instantly.

India’s readymade garment exports have been up 30% in FY22 to $15.9 billion in FY22 from $12.3 billion from a 12 months in the past.
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