Startup News Magazine

Spiralling Cotton Yarn Prices Deeply Impacting MSME Home Textile Sector

Mumbai, May 25: Prospects for the Home Textile Sector to achieve the target set this year is extremely difficult even though the Industry had opened up entirely after the second wave of the Covid-19 Pandemic. The Home Textile Sector mainly comprises MSMEs.

The Government of India has been highly Supportive. It has announced several measures like CGS, Loan Restructuring Measures, Moratorium, Deferment of interest Payments, ECLGS, and CGTMSE for MSMEs on account of the impact of Covid -19 Pandemic.

Mr. Amit Ruparelia, Convener of Made-Ups Exporters Forum, stated, “The main reason for the problem to achieve the target has been spiralling cotton yarn prices. Post the second wave, there had been excellent all-around demand for Value Add Products such as Home Textiles and apparel. The sector was fully geared up to meet the demand. However, during the same period, the millers started increasing the prices for Cotton Yarns even though the Raw Cotton prices were stable and at a later stage the cotton price too rose tremendously affecting the business of entire value chain segment”.

Presently, the situation is highly precarious, with the Value Chain Segment having to lose businesses and the Market Share in countries like the USA. It is also heading for closure of several MSME units unable to continue with unprecedented high prices of cotton yarns, resulting in severe JOB Losses.

The Government of India has been monitoring the situation. During the last stakeholders’ meeting, it stated that it might choose to withdraw benefits on exports of the cotton yarn and impose duties on exports of raw material if needed. If the supply chain can not ensure security for the supply of raw material at lower prices for the value chain to compete and obtain business, the Government may strictly act upon it.

However, so far, no correction has been observed. The Government may have to resort to ensuring corrective measures; sadly, the value chain segment is heading slowly towards demise in the form of capital and job losses.