Textile manufacturers in Tamil Nadu are facing a severe crisis due to fluctuating cotton and yarn prices. Industry leaders are calling for increased domestic productivity and a ban on cotton exports to protect small-scale garment units.
- Sharp volatility in cotton and yarn prices is putting severe pressure on textile mills.
- Surging demand from China and Bangladesh has driven up global yarn prices.
- The Tiruppur Exporters Association is demanding a government ban on cotton exports.
- A significant gap exists between domestic production (290 lakh bales) and total requirement (350 lakh bales).
Textile mills and garment manufacturing units across Tamil Nadu are sounding the alarm over the instability of raw material costs. With cotton and yarn prices continuing to fluctuate wildly, industry stakeholders are urging the Central and State governments to implement strategic measures to ensure raw material security and improve productivity.
Ashwin Chandran, Chairman of the Confederation of Indian Textile Industry, highlighted that a sudden spurt in global demand for cotton yarn—particularly from China and Bangladesh—has triggered price volatility. After a muted period since 2023-24, demand began picking up in December, leaving many mills that had maintained minimal 'hand-to-mouth' stocks vulnerable to price hikes.
Why This Matters
BozokMedia analysis shows that the textile value chain is currently trapped between rising input costs and competitive global pricing. When the cost of basic raw materials like cotton spikes, Indian garment exporters lose their edge, leading to the diversion of orders to competing nations, which threatens thousands of livelihoods in the SME sector.
The financial impact is stark: while the landed prices of clean cotton have risen by ₹70, yarn prices have surged by approximately ₹95 per kg over the last year. This margin squeeze is unsustainable for small-scale units.
"The entire industry's focus must shift toward improving domestic cotton productivity to ensure long-term raw material security and reduce import reliance."
The Tiruppur Exporters and Manufacturers Association has taken a harder stance, alleging that certain large spinning mills and traders are artificially restricting the supply of cotton to manipulate market prices. To counter this, they have formally requested the government to ban the export of cotton.
| Metric | Value (Lakh Bales) |
|---|---|
| Annual Requirement | 350 |
| Current Domestic Production | 290 |
| Imported Volume (Duty-Free) | 62 |
Historically, the western districts of Tamil Nadu have been the backbone of India's garment export industry. However, the current shortage—despite the government removing the 11% import duty on cotton—suggests that market manipulation may be outweighing the benefits of policy interventions.
Frequently Asked Questions
Q1: Why are yarn prices increasing despite imports?
A: Increased demand from China and Bangladesh, coupled with alleged artificial supply restrictions by large traders, has kept prices high.
Q2: What is the specific demand of the Tiruppur Exporters Association?
A: They are urging the government to ban cotton exports to prioritize domestic supply and stabilize prices for local SMEs.
