Huge Jump In Yarn Prices To Blame: Garment Makers .

Terming spinning mills' assertion that the reason for the slump in cotton yarn prices and demand was due to restrictions imposed by the government on exports as "unfounded and baseless", garment makers said that the unprecedented hike in yarn prices led to the current situation.

"The main reason for declining prices and demand for yarn was the unprecedented hike (by 100-150%) in yarn prices and corresponding increase in fabric prices in a one year period," a joint statement issued by leading apparel manufacturer and export associations said.

"The prices went up astronomically, not due to a major increase in demand, but due to speculation and hoarding in both cotton and cotton yarn," it said. "The apparel industry suffered, as they were unable to pass on the steep price increases to the final customers, due to price resistance," the statement issued by Apparel Export Promotion Council, Clothing Manufacturers' Association of India and Tirupur Exporters' Association said. Contending that the current yarn prices are reflective of the steep fall in cotton prices, garment producers said that most mills have bought cotton at much higher prices, which has led to the crisis.

Source : timesofindia.indiatimes.com