India: Textile mills suspending production due to decline in orders
"Textile exports continue to decline in June, mills suspend work on tepid demand", 15 July 2023
Textile and apparel exports shrank 11.3% in June compared with the year-earlier period even as several textile mills in the South suspended production on account of tepid demand.
Export of cotton yarn, fabrics, made-ups and handloom products slid 1.21% year-on-year (y-o-y). Shipment of manmade products saw a 17.22 % decline while export of jute products and carpets plunged 26.72 % and 15.43% respectively, according to data shared by the Confederation of Indian Textile Industry.
While textile exports in June were worth $1,624 million ($1,736 million in June 2022), apparel exports were to the tune of $1,248 million ($1,501 million).
Siddhartha Rajagopal, executive director of Cotton Textiles Export Promotion Council, said export of cotton products was expected to revive in two months as the rate of decline month-on-month in June for cotton textiles had reduced to (-) 1 21%.
Meanwhile, smaller textile mills in Tamil Nadu were suspending production due to lack of orders.
K.M. Subramanian, president of Tiruppur Exporters Association, said the smaller companies were the worst affected in the Tiruppur cluster.
“Factors such as slowdown in the U.S. and EU and lack of cost competitiveness were affecting textile and clothing exports. The yarn that should be exported is coming into the domestic market. There is already excess capacity in the country. These were among the factors affecting the textile industry,” said T. Rajkumar, chairman of Confederation of Indian Textile Industry...
An industry that worked for 3% to 6% profit is currently incurring 5% to 10% loss, they said. “All mills are suffering cash loss. The crisis has turned acute in the last two months,” said Mr. Rajkumar. The industry has sought the removal of 11% import duty on cotton, moratorium on repayment of principal amount and Emergency Credit Line Guarantee Scheme loans.