Apparel exporters from Tirupur have sought the Union government’s intervention to check incessant surge in yarn prices.

Usually, yarn prices increase with cotton prices, said R Sakthivel of Daffodil Fashion. “Prices go up by Rs 2 to Rs 5 per kilogram. But, this time, there has been a continuous increase, disproportionate with cotton prices. Since December, yarn prices have increased by Rs 65 per kilogram, which is expected to go up. Yarn prices have never gone up so steep in the last few decades,” he said.

Exporters are struggling to take new orders and to process existing orders because of the price rally, Sakthivel said. “Its impact would become visible within two months. A lot of apparel units might shutdown due to lack of orders and it will have a ripple effect on the industries depending on them.”

Most of the yarn mills in the northern part of the country that used to make a significant percentage of yarn are functioning with 50 to 60% of workforce since the lockdown, said another exporter. “Now, most of them prefer to export yarn rather than sell it in the local market, leading to yarn shortage. This has triggered panic buying,” he said.

About 90% of the products exported from Tirupur are core products that can be made in any other country, said V Elangovan, president of the Buying Agents Association. “Already countries like Bangladesh and Vietnam have an advantage over us due to the free trade agreement. In this situation, if we demand retailers in European countries to revise the price, then chances are high that we might lose our orders. It will be very difficult to regain our place.”