Expansion of cotton, yarn prices may affect apparel exports target

The unabated surge in cotton and cotton yarn prices could affect the country's apparel exports target of USD 19 -- 20 billion during the current fiscal, AEPC chairman Narendra Goenka said on Thursday.

He said that the prices have jumped by around 125 -- 130 per cent during the last 18 months and one of the reasons for that would be unchecked exports of cotton and cotton yarn.

He suggested that the government should impose a temporary ban on cotton and cotton yarn exports, like Indonesia has done for its palm oil.

In the year 2021 - 22, the exports were USD 16 billion and we are targeting USD 19 -- 20 billion this fiscal. It looks like there is a concern about achieving the target because of the price rise. The industry is facing a lot of challenges on the raw material front, Goenka said.

He said that if the price rise does not stop, global customers would start looking at sourcing options other than India.

Approximately 60 - 70 per cent of cotton and cotton yarn are going to our rival countries like Bangladesh and Vietnam. He said that this is a worrisome situation.

He said that the Apparel Export Promotion Council AEPC is taking several steps like organising buyer-seller meetings in different parts of the world to promote exports.

The free trade agreement with UAE and Australia is going to give a huge boost to our exports. He said that a resolution of the raw material issue will help in availing full benefits of the agreement.

Piyush Goyal, the union commerce minister, recently held a meeting with stakeholders of the cotton value chain to discuss the surging cotton and yarn prices in the current season.

Goyal asked stakeholders to resolve the issue with collaborations without pushing the government to intervene, which would have a long-term impact on the cotton value chain.

Goenka said that the apparel industry is in expansion mode because of the benefits of production linked incentive and other schemes.

In April of this year, ready-made garment exports rose by 21.4 per cent to $ 1.57 billion, compared to the month of last year.