Tirupur: Hosiery yarn prices in the district have surged by Rs20 per kilogram across all varieties in May, marking the second price increase this month and bringing the cumulative rise over the past five months to Rs61, according to industry sources.
Impact on Tirupur's Knitwear Hub
Tirupur, one of India's largest hubs for readymade garment production and exports, accounts for over 68 percent of the country's knitwear exports. Hosiery yarn, a critical raw material for knitwear manufacturing, has experienced price fluctuations in recent months, largely mirroring movements in cotton prices.
Government Policy and Cotton Prices
Industry stakeholders noted that the Union government had waived the 11 percent import duty on cotton from August to December last year, which helped stabilize prices. However, after the exemption was withdrawn in December, imported cotton became costlier, leading to an increase of Rs4,000 to Rs5,500 per candy in domestic cotton prices.
Following this, hosiery yarn prices rose by Rs7 in February and remained steady until mid-March, when another increase of Rs7 was announced. Prices were then raised by Rs10 each on April 1 and April 16, followed by another Rs7 hike on May 1. The latest increase of Rs20, the second hike this month, has heightened concerns among garment manufacturers.
Trader and Industry Concerns
G P Prasanna, a cotton and hosiery yarn trader in Tirupur, stated that the cumulative increase of Rs61 in a short period is placing significant pressure on garment producers. Industry sources said the rise is also driven by global factors, including higher crude oil prices amid geopolitical tensions, which have pushed up viscose and polyester yarn costs.
Cotton prices, which were around Rs65,000 to Rs70,000 per candy earlier this year due to supply constraints, have further added to the pressure on yarn prices. Textile exporters from Tirupur recently met Union ministers, seeking a waiver of cotton import duty and asking the Cotton Corporation of India to ensure adequate supply of cotton to mills.
Effect on Manufacturing Costs
Against this backdrop, the latest increase in hosiery yarn prices is estimated to have pushed up garment manufacturing costs by 15 to 20 percent, industry sources said. Hosiery yarn is widely used in the manufacture of undergarments, vests, and briefs.
After the latest revision, combed yarn prices range from Rs244 per kilogram for 10s count to Rs372 per kilogram for 40s count, while semi-combed yarn prices range from Rs309 to Rs362 per kilogram, depending on the count.
