Cotton Yarn Price Surge Puts Pressure on Karur Textile Industry

Manufacturers Cite Supply-Demand Mismatch and Rising Input Costs Amid Market Uncertainty

The textile industry in Karur is facing challenges following a significant rise in cotton yarn prices and increases in the cost of other raw materials.

Industry sources said textile manufacturers in Karur procure cotton yarn from mills located in Coimbatore, Dindigul, Virudhunagar and Vellakoil. They reported a strong mismatch between demand and supply for thicker yarn over the past six weeks, resulting in a sharp increase in prices ranging between 30% and 40%.

One kilogram of high-count cotton yarn is currently priced at ₹400, compared to ₹300 earlier.

Textile manufacturers and exporters in the region have described the increase in yarn prices as abnormal.

While the Centre recently removed the import duty on cotton yarn following demands from the textile industry, industry participants in Karur said the measure has primarily provided relief to garment manufacturing units in the Tiruppur region.

Manufacturers noted that the price of yarn used by garment units had eased to some extent, but there was no corresponding change in the price of thicker yarn used by textile manufacturers in Karur. They added that profit margins in manufacturing units had declined to 3% to 4%.

“We do not understand the reason behind the increase in price of cotton yarn. Stable price of yarn, which is a key raw material in textile manufacturing, is necessary for the smooth sailing of the industry. The current increase in cotton yarn price is unprecedented. It has hit us very hard,” says P. Gopalakrishnan, president, Karur Textile Manufacturers and Exporters Association.

According to P. Gopalakrishnan, the issue has been brought to the attention of both the Centre and State governments by the South India Mills Association and Tamil Nadu Spinning Mills Association, seeking intervention to stabilise yarn prices.

Industry participants also pointed to geopolitical tensions between the U.S. and Iran, stating that the developments have affected global trade and international shipping.

They further noted that the prices of several essential inputs used in textile manufacturing, including polyester, chemicals used in dyeing industries, polythene and packaging materials, have recorded steep increases in recent weeks.

Exporters in the region said continued escalation in input costs could affect the operations of the Karur textile industry and impact export growth and employment opportunities.