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Rising Cotton Prices Behind Indian Garment Makers’ Strike Plan

Garment units in the southern Indian city of Tirupur will be closing up shop from May 16-21 to protest the surging cost of cotton.

The Tirupur Garment Owners Association, which made the strike call Tuesday, said it expected prices to cool down after the government temporarily waived duties on cotton exports last month. Instead, mills have hiked the cost of cotton by 40 Indian rupees (52 cents) per kilogram, “which has made us weaker,” said M.P. Muthuraman, the trade group’s president. “We have no choice except to shut down our businesses as a form of protest.”

India, the world’s largest cotton producer, contributes 22 percent of the fiber sold globally. A number of cotton-growing states, however, were pummeled by excessive rain during the most recent growing season, causing domestic production to fall 4 percent from 36-37 million bales in 2020-2021 to 34 million bales in 2021-2022. Local demand alone is expected to exceed 36 million bales this year.

Some experts believe that U.S. sanctions on cotton from China’s Xinjiang Uyghur Autonomous Region, which makes up 85 percent of Chinese cotton, could also play a role in increasing demand for Indian cotton, driving up prices further.

Raja Shanmugham, president of the Tirupur Exporters Association, told the Indo-Asian News Service Tuesday that North Indian traders could be hoarding cotton, leading to a scarcity of the product. “We request the union government to effect a ban on the export of cotton yarn till the price stabilizes,” he said.

Garment groups are also urging the government to remove cotton from the commodity list by declaring it an essential commodity. This, they said, would ensure cotton’s availability at fair prices.

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The Southern India Hosiery Manufacturers Association said in a statement that even if mills sourced overseas cotton, it would take at least three months for shipments to arrive. Regulating local supply then is essential. Tamil Nadu Spinning Mills Association special advisor K. Venkitachalam told the Indo-Asian News Service that prices per candy—approximately 2.09 bales or 356 kilograms—immediately fell in the wake of import duty removal, but they climbed up again due to the fiber’s lack of availability.

Known as the knitwear capital of India, Tirupur is one of the biggest garment manufacturing centers in the nation. The Tamil Nadu hub boasts roughly 22,000 garment factories that provide employment to 600,000-plus workers, 60 percent of whom are women and a third of whom are migrants from other parts of India.

Knitwear exports, according to the Tirupur Exporters Association, are expected to reach 33,000 crore Indian rupees ($4.3 billion) in 2022, up from 27,280 crore Indian rupees ($3.6 billion) the previous year.

The association previously suggested a desire to increase Tirupur’s global market share, which stands at 2.6 percent, by exporting value-added and synthetic products. The cotton crisis may accelerate this.

“Most of the global markets demand synthetic products and we have to meet the buyers’ demand on this,” officials told the Financial Express last month. “We are working on product diversification.”

A. Sakthivel, president of the Federation of Indian Export Organisations, told the Hindu in late April that Tirupur was also prepared to handle the 30 percent to 40 percent of orders that might be diverted from Sri Lanka in the coming months as a result of the island nation’s growing economic and political crisis.