High prices always result in a market taking a huge hit and Karur’s home textile mart seems to be reeling under it. Surprisingly, it is not demonetization but the government’s export policy, which is to blame for the crisis. The biggest downturn is the struggle for regular export business, as orders are not being met. Prices of yarn have crossed 35 per cent and this has put a spook in the wheels of the Rs 4,000 crores Karur textile market. Explaining the situation M Nachimuthu, Karur Exporters' Association president says even if it is made available, the price of lower count yarn is very prohibitive.
Exports businesses ply with fixed prices, which are pre-discussed and valid for the entire year. Once contract is made with overseas clients prices cannot be changed. With other cheaper markets like Pakistan and China making inroads, the leading home textile market in Karur is taking a hit. It is time for the government to rectify its pricing and policies. High yarn prices are affecting India’s position as a global leader of home textiles.
Currently, production units use higher count yarn to meet contractual obligations of their overseas clients. If spinning mills do not have sufficient cotton then it could spell disaster for the looms. The association is now worried that the premium being put on exports is eating into domestic market. Unable to meet commitments, many sellers are now facing a financial crunch. The Central government needs to step in to check rising prices of cotton yarn.