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Incorrect data submitted by spinning associations

Nov 26, 2021
Incorrect data submitted by spinning associations

New Delhi


Incorrect and skewed data was submitted to Piyush Goyal, Minister of Textiles, Commerce and Railway, by CITI and spinning associations, claims Dr Rikhab C Jain, Chairman of T T Limited and a textile industry veteran, in a letter addressed to Chairman, Apparel Export Promotion Council; Chairman, Clothing Manufacturers Associations of India; Presidents & Secretaries of All Garment Associations & Hosiery Associations; and Prominent Garment Manufacturers and Hosiery & Powerloom Manufacturers.


“There are conflicting interests within textile industry. No Doubt. But none of the stakeholder should give any wrong information, incorrect data, skewed and twisted data about impact of space rocketing cotton prices 70% plus rise within last few weeks,” he added.


CITI mentioned that “cotton accounts for 55% to 60% of yarn cost and yarn cost account 20% to 25% of the garment and made-up cost”. This statement, according to Dr Rikhab Jain, is untrue, wrong and is enough to create adverse mind set for any decision maker.


“In paragraph 1 of CITI statement mentions that yarn cost for garment is 20% to 25% only. This is absolutely wrong. Yarn cost for garment, made up and hosiery articles will range from 40% to 65% depending upon lower segment, middle segment or higher segment products. Obviously packing cost and value addition is more in case of elite products, but even their yarn cost is not less than 40%. In case of fabric, yarn cost may touch even 80% to 85%. For instance, for white cotton knitted fabric the value addition is just 15% to 20%,” said Dr Rikhab Jain.


Similarly, statement that of 20% to 25% is only yarn cost in case of made ups is also absolutely wrong. It would be normally in lines with other fabrics only as made ups have no tailoring cost at all.


Dr Rikhab Jain said, “Spinning mill associations and CITI have wrongly printed papers to impress that rise in cotton prices and cotton yarn prices have not gone up in tandem. Cotton yarn prices have moved up by 65% plus against cotton price moving up by 80% approximately in the post COVID period. It is very clear that yarn prices have moved up much more than warranted by cotton prices. Even if cotton cost is taken as 60% of yarn cost, yarn prices should not have increased by more than 50% to 55% (assuming 10% inflation in other costs).”


On this issue, it must be further clarified that consumers pocket is almost empty due to pandemic, loss of earning, rise in food prices and food products prices and due to inflation shoot up in other consumer have left no money to buy clothing. “Everyone knows that rise in clothing prices will highly adversely impact demand locally and internationally. It has been seen during mill strikes in Ahmedabad and Mumbai in Eighties,” Dr Jain added.


As prices of knitting, processing and margins of spinning mill have increased, garment and apparel sector have to raise this issue about their burden due to cotton and yarn price rise. “Lot of spinning mills earn reasonably but not unduly. Let not speculate in cotton, not disturb the textile industry, the mother industry of India. Wrong fact was presented to Hon’ble Minister. It is very disturbing fact that wrong data, wrong fact presented to minister with an objective that government should not to take any action against speculation and against cotton speculators,” said Dr Rikhab Jain.


In the letter, he has appealed to all garment, apparel & hosiery, made ups, fabric manufacturers (including khadi and handloom) to take immediate action towards the crisis imposed by historical speedy rise in cotton prices without any significance.


“CITI in fact is not an apex textile body but only a new version of Indian Cotton Mills Federation (ICMF). Let fresh representation be made to Government of India and spinners associations with hope to get situation corrected in an amicably desirable manner in the interest of the entire textile industry,” said Dr Rikhab Jain.