High cotton prices, garment makers diversify in Punjab: The Tribune India


Tribune press service

Vijay C Roy

Chandigarh, May 22

Soaring cotton and cotton yarn prices seem to be weighing on the garment industry in India and Punjab is no exception. As exporters fear losing customers, manufacturers serving the domestic market have diversified into polyester-blend garments to offset high cotton prices.

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This is difficult to maintain in a price-sensitive domestic market. Thus, almost all of Ludhiana’s manufacturers, including MSMEs, have diversified or are planning to diversify into the blended or all-polyester fabric market. Sanjeev Dhir, Puneet Knitwear Partner, Ludhiana

A drop in cotton production during the last season coupled with a sharp increase in demand from textile units, which had secured export orders, led to cotton shortages in the country.

Over the past year, cotton yarn prices have gone from

From Rs 175 per kg to Rs 400 per kg. At Rs 150 per kg, polyester yarn costs almost a third of cotton. So it makes sense for manufacturers to diversify.

According to the industry, due to diversification, there has been a surge in demand for polyester knitted yarns. The domestic clothing market is pegged at Rs 3.25 lakh crore and it is almost three times larger than the export market.

In Punjab, Ludhiana is the main garment hub. There are around 10,000 units in Ludhiana involved in the whole textile value chain.

Not only small units, but even bigger players are feeling the heat of the rising cost of wire. Even the government’s decision to abolish import duties on cotton did not bring much-needed respite to the struggling textile industry.

Harish Dua, MD of Ludhiana-based KG Exports said, “Those who were catering to the domestic market have branched out into polyester garments. Exporters, however, don’t have much choice. They are afraid of losing customers because an unreasonable price increase makes manufacturers uncompetitive in the international market and we end up losing customers.

Exporters are demanding that the government immediately ban the export of cotton yarn, otherwise it would have a cascading effect on every stage of manufacturing.

Michael O. Stutler