On Friday, textile mills reduced yarn prices by 40 rupees per kilogramme in Tiruppur market, providing relief to the knitwear industry. Raja Shanmugham, President of Tiruppur Exporters' Association, stated that the mills are also providing discounts. This is due to low demand for yarn.
Tiruppur's market is usually dead in July and August. Production is primarily for winter clothing and is relatively low in volume when compared to demand during the summer season. Because mills want to get rid of their yarn stocks, prices have fallen.
"After 18 months, the prices have dropped." Though this will provide relief to garment manufacturers, he does not know when prices will stabilize.
Brands will prepare for the coming season, and lower yarn prices will benefit exporters. With the rupee depreciating as well, garment exporters anticipate a rebound in orders, he added.
According to one industry source, the yarn price reduction has come too late for domestic manufacturers. Even as recently as last month, manufacturers sought lower yarn prices. However, mills have decreased now that most hosiery manufacturers have supplied goods for Deepavali orders.
Textile mills have a 15-day to a one-month supply of both yarn and cotton. This is due to the previously high raw material prices. Despite the fact that most mills had reduced production the previous month, there was little movement of yarn in June.
"Many mills are also concerned because they have ordered higher-priced cotton imports." "The cotton will be delivered now, as domestic prices are falling," a textile mill source in Coimbatore said. However, the impact may not be as severe as it was about ten years ago because many mills have lower stocks due to price volatility, according to the source.
