Textile exports being hit by highly appreciated rupee and soaring raw cotton exports in FY11, although there might be limited impact with the effect of recovery in competitive pricing and global demands, said the industry players.

Increasing prices of raw material and a firm rupee are a big concern…but we are hoping as long as the prices remain higher along with the international demands out exports will keep growing, explained D.K. Nair, secretary general at CITI, Confederation of Indian Textile Industry.

Rupee has increased up to 4.6% as against US dollar till now in 2010. Export realizations for textile and apparel exporters get reduced with stronger rupee.

A strong movement in exports of cotton is getting scarcity in domestic supplies, pushing up commodity prices which are the important input for apparel and textile makers.

Cotton exports of India 2009/10 are likely to increase up to 129%, 8 million bales on year, forced by active demand from Bangladesh and China, said a senior official from government department in the statement given last week.

During 2008/09, 3.5million bakes has been exported by the country and initially too 5.5million bales exports have been estimated by the government for the year but slightly less production in China, majority consumer, has supported exports.

Chinese exports have been much better…approx 56% of the total exports or 3.08million bales so far, said Mr. A.B. Joshi, the chairman of CAB, Cotton Advisory Board, body of growers of cotton, government, traders, ginners and industry associates

During the same period, International prices for cotton have been raised by 67% approximately still keeping the textile industry competitive, but attractive pricing need to done for the exports of end products.

Impressive rise of rupee against Euro during 2010 could result in eating away the profits of many textile mills and also reduce the dwindling trade of India with EU, European Union.

There has been an 11% rise in the rupee against the Euro during 2010, among the rising assumptions that there could be a failure by Greece to pay its sovereign debt. Quote for rupee against Euro was at 66.61 in December 2009, was 59.26 at the end on April 9, 2010.

Partly convertible, Rupee was at 44.28/39 per dollar, after a peak of 44.23, best since 8 September 2008, and .4% stronger than 8 April 2010, Thursday, closing at 44.46/47.

Regardless of the country, all the transactions occur in US dollars. This basically affects the Euros and lead to a drop in it in comparison to dollar in 2010 by 6.6%. Textile industry would be affected by this but with a nominal impact only.

However, the impact could be bad or good for big textile companies, as per the total exports of textile industry of India; only 10-15percent is the European overseas sales, although payments are handled in US dollars only. Heat could be felt by smaller companies as they don’t really have any access to the derivatives of the foreign currency.

Realizing that spinning sector hit the recent cotton yarn crises badly, textile mills insisted the center, most importantly the Union Textiles Ministry, for allowing expansion to the industry and meeting the raised demands for both levels, domestic and global.

While moderating the cotton process and welcoming the process of containing exports of cotton yarn, owners of the mills are urging Mr. Dayanidhi Maran, Minister of Textile for taking more actions to ease and support the ‘supply side’ and make sure that capacity of the mills should be expanded and the production levels too should be raised.

Textile Industry captains feel that the industry was majorly hit by discounts offered to the export of cotton yarn and its ‘unfettered export’ than the global slowdown, the spinning mills especially. Competitive countries like Bangladesh got benefited from the affecting crises that lead to shrink of the Indian textile industry. It was only during later 2009, that the situation got corrected by Mr. Maran’s intervention.

When TUF, Technology Up-gradation Fund was cleared and some Rs. 2,000crore backlog was reimbursed, many textile mills retained their working capital and began to expand capacity gradually.

Suspension of 7.5 percent duty concession privileged to exporters of cotton yarn has been decided by the Centre under the DEPB (Duty Entitlement Pass Book) scheme, as an important part of measure to moderate commodity price in the domestic market.

At Meeting, headed by Pranab Mukherjee, Finance Minister on 6thApril 8, 2010, decision was given to impose ‘prohibitive duty’ on the exports of cotton yarn and raw cotton. Official Inter-Ministerial Committee would be deciding on the ideal quantum of levy.

It expected that the panel will be coming out with all the recommendations in while. The first meeting of this is scheduled for 8th April 8, 2010 only. This could be in cess form too, sources explained.
Sharad Pawar, Agriculture Minister, Dayanidhi Maran, Minster of Textiles and Anand Sharma, Commerce Minister attended the meeting and decided about the introduction of mechanism for cotton exporter’s registration.

It was also decided that measures will be taken for ensuring a carry forward of not less than 50lakh bales of cotton raw material in the beginning of the next session.

A series of letters have been recently written by Mr. Maran to Mr. Manmohan Singh, Prime Minister and other ministers of commerce, agriculture and finance to urge immediate steps for controlling the cotton yarn prices that had risen steadily within the recent few months.

Problems had already being faced by the garment export industry, followed by global meltdown. Estimates show that around $7.92 billion worth exports were achieved by the sector during April (2008) – January (2009) in comparison to $8.81 billion that was there in same period during the previous year, showing 10.16 percent decline.

Chennai: Dayanidhi Maran, union textile minister expressed his concern about the rising prices for yarn and said that protective measures will be taken by the government for protecting the interest of garment and handloom manufacturers.

Yarn prices have been really high and are affecting the garment and handloom manufacturers. Steps will be taken to ensure that the prices of yarn are available at reasonable levels, said Mr. Maran, but it was not elaborated what the measures are likely to be taken. Announcement is expecting within a week. Prices for yarn have been raised over by approx 30% in previous 3 months time.

While having a word with the media professionals in Chennai on 3rd March 2010, at sidelines of exhibition cum conference on traditional industries, initiated by Ficci, in co-operation with council for Handloom Export Production and Leather exports, the minister expressed that while handlooms were not being promoted by China in a bigger way, industry would prove to be huge strength for the nation, as it provided craftsmen for creating unique designs to be sold around the world. More business prospects can be expecting by better marketing said Maran.

Expressing that handloom sector of Tamil Nadu was one of the best promoted ones; Mr. Maran introduced the establishment of Chennai Haat, just the way of ‘Dilli Haat’ of Delhi. This step would be forwarded for eliminating middlemen and for providing ground to craftsmen from all around the state.

Mumbai: Rupee gets appreciation in comparison to other currencies like euro and US dollar and rising prices of raw material, have resulted in hitting the slow-down of textile sector which is still hanging up with a thread.

More than half of the apparel and textile exports of India are heading towards European and US countries and the raise in rupees has resulted in increasing the targets and profit margins of the exporters.

Rupee kept on ruling high at 61.76 to Euro and 44.97 to dollar on 29th March when foreign currency was on increased flow in the equity market. Domestic currency has been appreciated nearly by 14.5% in comparison to euro and more than 5% in dollar during the previous 5 months.

Adding on to the troubles of textile sector, rates of yarn and cotton have been raised up to 20-25% within the previous 6 months on increase in textile exports to China, Korea and Bangladesh and speculative commodity future trading.

Prices of cotton have been raised to Rs. 27,800, over by 20% a candy or 355.55kgs during March 2010, which was Rs. 23,200 per candy during July 2009. Prices for yarn have been raised by 25% to Rs 174 per kg in comparison to Rs 140 per kg within the same period.

SURAT: Workshop on latest opportunities in textile sector for upcoming women entrepreneur is likely to be held on 26th March 2010 at SGCCI, South Gujarat Chamber of Commerce and Industries.

Joint textile commissioner at the Ministry of Textile, Rashi Singh, will be attending the occasion. The main speaker at the event is the general manager at district industrial center and joint industries commissioner, Mr. Dhaval Parikh.

Workshop is being scheduled by joint efforts of the Federation of Indian Chamber of Commerce and SGCCI, duly supported by Ministry of Textile, central government.