Rates of yarn tumble but no takers as recession hits garment sector

LUDHIANA: In a setback to the garment industry, the rates of different types of woollen and cotton yarns have registered a fall of 10 to 15% during a span of two months. The reason attributed for this fall is the recession being faced by the garment industry despite the production for winter garments having commenced a month ago.
According to the garment manufacturers and traders, the recession is outcome of several reasons including liquidity issues with distributors and dealers and overproduction.It is likely that the rates of woollen yarns will fall further due to the anticipated decrease in production.
Ludhiana MSME Association president Harish Kairpal said “Owing to the severe recession in the garment industry, the rates of all types of woollen yarns and some cotton yarns have taken a hit during the last few months. The rate of each of them has fallen by 10 to 15%. The price of the most-widely used Daffodil yarn has dropped from Rs 345 per kg to Rs 310 in a month while the rate of Rainbow yarn, which was Rs 345 two months ago, is now Rs 315 per kg.”
“The rates of all types of polyester cotton (PC) yarns have reduced by Rs 30-40 per kg while the rate of imported fabric for jackets has also plummeted by Rs 20 per meter as compared to last year,” he said.
The businessmen opined that the garment industry is bound to suffer huge losses in the wake of the leftover stock from last year and lack of enough orders during the onset of the winter season productions this year.
“At this time every year, the production for winter season commences and garment intensive unit areas including Shivpuri, Madhopuri, Kundan Puri and others are usually abuzz with activity. However, this year some factories are totally shut, while in others, production has dropped to a mere 20% as there is hardly any demand.”
“All these are indicators that this season will be a flop for our industry and every unit will suffer huge losses” added Kairpal.
Ludhiana Business Forums president Dinesh Kalra said, “Even after huge reduction in rates of yarn some of which are available at throwaway rates, there are no takers because there is no clarity on when the orders from distributors and dealers based in other states will pour in.”
“The garment industry is in grip of recession and the problem has been caused due to cash crunch, overproduction and overstocking of the garments at different levels in the demand and supply chain. As of now, it is hard to say for how long this will last but averting the losses seems very unlikely,” he added.