Garment sector gains pace post slowdown

Coimbatore:The slowdown in the international market brought down the export performance of the spinners and weavers in the country, said T. Rajkumar, chairman of the Southern India Mills’ Association (SIMA). “The Indian market is normally dull during peak summer. Capacity utilisation in major weaving clusters, particularly Maharashtra and Tamil Nadu, declined by 20 to 30 per cent,” he said in a statement.

Pointing out that the cotton based textile industry performed well this year compared to previous years, Mr Rajkumar, however, said there was sluggishness in the market during April-June 2014 due to a decline in yarn exports to China, and also fall in the demand for fabrics.

“This has resulted in over supply, causing a dip in yarn prices to the tune of Rs 10 to Rs 25 per kg depending upon counts. However, the garment sector had around 15 per cent growth during the current year, compared to the previous year,” he said.

Advising mills and manufacturers not to get nervous by such temporary sluggishness in the market, Mr Rajkumar hoped that the cotton prices in the domestic market would grow to match international prices in the days to come. The SIMA chairman said market sentiments across the value chain had started improving immediately after the announcement of the Union Budget due to the extension of the optional Cenvat route and also various transparent policies. “Enquiries for yarns and fabrics have started improving due to increased demand for finished goods, particularly garments and made ups as the festival season is fast approaching,” he said.

Mr Rajkumar said there was a delay in cotton sowing due to the late monsoon in the country, and, therefore, the arrival of new cotton would also be delayed. The availability of cheaper cotton from the international market would partially balance prices in the Indian market as China had also planned to reduce its imports.