Rising cotton, yarn prices could hit garment export targets: AEPC chairman

APC Chairman Narendra Goenka on Thursday said the steady rise in cotton and yarn prices could affect the country’s garment export target of -20 19-20 billion in the current financial year.

He said prices had risen by about 125-130 per cent in the last 18 months and one of the reasons was that cotton and yarn exports would be “uncontrolled”.

He advised the government to impose a temporary ban on exports of cotton and yarn, such as Indonesian palm oil.
“In 2021-22, exports were 16 16 billion and we are targeting -20 19-20 billion this fiscal year. But the rise in prices seems to be a cause for concern. The industry is facing a big challenge on the raw materials front, ”said Goenka.

He added that if the price hike does not stop, consumers worldwide will start looking at sourcing options other than India.

“About 60-70 per cent of cotton and cotton yarn is going to competitive countries like Bangladesh and Vietnam. This is a worrying situation, “he said.
In expanding exports, he said the Garment Export Development Council (APC) was taking a number of steps, such as holding buyer-seller meetings in different parts of the world, to boost exports.

“Free trade agreements with the UAE and Australia will give us a significant leap in exports. Resolving the issue of raw materials will help to get the full benefit of this agreement, ”he said.

Union Commerce Minister Piyush Goyal recently held a meeting with the stakeholders of the cotton price chain to discuss the rise in cotton and yarn prices this season.

Goyal called on stakeholders to work together to resolve the issue through co-operation without pressuring the government to intervene, which the minister warned would have a long-term impact on the cotton price chain.

Goenka said the rise comes at a time when the garment industry is in expansion mode, taking advantage of manufacturing incentives and other projects.

The council is exploring new markets in South America and Africa to boost exports.
Exports of readymade garments increased by 21.4 per cent to USD 1.57 billion in April this year as compared to the same month last year.

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