Tiruppur garment units go silent as high yarn prices get them in trouble – The New Indian Express

Express press service

TIRUPPUR: Nearly a third of existing garment and industrial processing units have become idle in the last three months in Tiruppur as soaring yarn prices render the business unviable.

The city, known as India’s knitting hub, looks desolate as exporters lament their inability to fulfill orders. They blame it squarely on the ever-increasing yarn prices. Prices of all kinds of cotton yarn (30s and 40s count) with combed and semi-combed varieties hovered around Rs 220-290 per kg in 2021. They started a journey north, cotton mills increasing prices by 30 to 40 rupees. per kg every month, starting from August 2021. In early 2022, yarn prices in all categories crossed Rs 400 per kg.

“High price of yarn is one of the major reasons for the drop in production,” says MP Muthurathinam, chairman of Tiruppur Exporters and Manufacturers Association. “Exporters have not been able to negotiate better prices with foreign buyers. So they started cutting production and buying yarn from the mills.

In addition, domestic garment manufacturers have raised the price of garments and supplied them to markets in northern India. But distributors in those markets have reduced their orders, leading to lower production. Since the compacting, dyeing, sewing and garment printing units are linked to manufacturing, everyone is affected by the drop in production,” he explains.

“Hundreds of inter-district workers left Tiruppur”

Meanwhile, as yarn stocks pile up, the Tamil Nadu Spinning Mills Association has asked its members to halt production from Monday. The war in Ukraine also played its part, preventing foreign buyers from offering better prices.

Industrial electricity consumption also fell from a monthly average of 5.5 crore (June-December 2021) to 4.5 crore (January-June 2022).

A TANGEDCO official recalls that towards the end of the first pandemic lockdown, there were 11,300 industrial processing units, consuming power through LT service, in the city. This figure rose to 12,400 in December 2021. “Electricity consumption should have increased proportionally, but it has not. Between June 2021 and June 2022, we have seen a drop in consumption of one crore units over the past six months. I think the industrial units mainly associated with the garment industry in the city of Tiruppur either did not operate at full scale or stood idle. »

Harvey Exports owner C Ramasamy says high yarn prices are making it difficult for garment exporters to negotiate orders. “Last year, the price of yarn was around Rs 220 per kg (30 second count). But, in April and May, the price jumped to Rs 440 per kg. At this price, we cannot make clothes. It will be a pure loss for us,” he said.

The decline in production has also affected workers. “More than 80% of garment manufacturing units fall under the MSME sector. These units employed the largest number of workers in the garment industry. Due to the yarn price crisis, these units cannot operate. A few months ago, many units were operating night shifts and double shifts for workers due to large orders. But due to low production and idle units, most crafting units operate with a single shift. Workers, mostly from poor families, are feeling the heat and worried about the future of the industry. Migrant workers are even more worried,” says N Sekar of the banyan union AI TUC in Tiruppur.

According to Sekar, export and domestic garment companies have stopped recruiting new migrant workers from northern and northeast India in the past six months. “Currently, male and female migrant workers in hostels are being deployed to work. Hundreds of inter-district migrant workers from Pudukkottai, Dindigul, Madurai and Tiruvannamalai have already left Tiruppur,” he says.

“I had employed more than 40 workers in my establishment, but now my establishment on Dharapuram Road remains idle and I am only paying workers an advance to retain them for future orders,” Ramasamy says. According to income records, there are more than 1.30 lakh laborers from other states employed in the garment industry in Tiruppur.

TIRUPPUR: Nearly a third of existing garment and industrial processing units have become idle in the last three months in Tiruppur as soaring yarn prices render the business unviable. The city, known as India’s knitting hub, looks desolate as exporters lament their inability to fulfill orders. They blame it squarely on the ever-increasing yarn prices. Prices of all kinds of cotton yarn (30s and 40s count) with combed and semi-combed varieties hovered around Rs 220-290 per kg in 2021. They started a journey north, cotton mills increasing prices by 30 to 40 rupees. per kg every month, starting from August 2021. In early 2022, yarn prices in all categories crossed Rs 400 per kg. “High price of yarn is one of the major reasons for the drop in production,” says MP Muthurathinam, chairman of Tiruppur Exporters and Manufacturers Association. “Exporters have not been able to negotiate better prices with foreign buyers. So they started cutting production and buying yarn from the mills. In addition, domestic garment manufacturers have raised the price of garments and supplied them to markets in northern India. But distributors in those markets have reduced their orders, leading to lower production. Since the compacting, dyeing, sewing and garment printing units are linked to manufacturing, everyone is affected by the drop in production,” he explains. ‘Hundreds of inter-district workers left Tiruppur’ Meanwhile, as stocks of yarn pile up, the Tamil Nadu Spinneries Association has asked its members to halt production from Monday. The war in Ukraine also played its part, preventing foreign buyers from offering better prices. Industrial electricity consumption also fell from a monthly average of 5.5 crore (June-December 2021) to 4.5 crore (January-June 2022). A TANGEDCO official recalls that towards the end of the first pandemic lockdown, there were 11,300 industrial processing units, consuming power through LT service, in the city. This figure rose to 12,400 in December 2021. “Electricity consumption should have increased proportionally, but it has not. Between June 2021 and June 2022, we have seen a drop in consumption of one crore units over the past six months. I think the industrial units mainly associated with the garment industry in the city of Tiruppur either did not operate at full scale or stood idle. Harvey Exports owner C Ramasamy says high yarn prices are making it difficult for garment exporters to negotiate orders. “Last year, the price of yarn was around Rs 220 per kg (30 second count). But, in April and May, the price jumped to Rs 440 per kg. At this price, we cannot make clothes. It will be a pure loss for us,” he said. The decline in production has also affected workers. “More than 80% of garment manufacturing units fall under the MSME sector. These units employed the largest number of workers in the garment industry. Due to the yarn price crisis, these units cannot operate. A few months ago, many units were operating night shifts and double shifts for workers due to large orders. But due to low production and idle units, most crafting units operate with a single shift. Workers, mostly from poor families, are feeling the heat and worried about the future of the industry. Migrant workers are even more worried,” says N Sekar of banyan union AI TUC in Tiruppur. According to Sekar, export and domestic garment companies have stopped recruiting new migrant workers from northern and northeast India in the past six months. “Currently, male and female migrant workers in hostels are being deployed to work. Hundreds of inter-district migrant workers from Pudukkottai, Dindigul, Madurai and Tiruvannamalai have already left Tiruppur,” he says. “I had employed more than 40 workers in my establishment, but now my establishment on Dharapuram Road remains idle and I am only paying workers an advance to retain them for future orders,” Ramasamy says. According to income records, there are over 1.30 lakh laborers from other states employed in the garment industry in Tiruppur.

Michael O. Stutler