NEW DELHI: Rise in cotton prices and consequent increase of up to 42 per cent in fabric costs in the past one month has come as a double whammy for garment exporters, hit by global demand slowdown, the Apparel Export Promotion Council (AEPC) has said.
Fabric prices have jumped dramatically, forcing many exporters to cut production and honour contracted quantities at a loss, it said.
"The rising prices of fabric, which constitute 55 to 60 per cent of export values, have increased between 23-42 per cent in the past one month," AEPC Chairman Rakesh Vaid said.
As per industry sources, cotton prices have gone up in the past few weeks as international contractors were booking the commodity for imports.
"Rise in cotton prices have pushed up fabric prices," he said, adding that the Cotton Advisory Board has reported lower estimates of cotton crop by 10 lakh bales.
"This is fuelling speculation that fabric prices may go up further," Vaid said.
India's garment exports dipped 7.32 per cent during April -September to $4.84 billion from $5.22 billion in the year-ago period due to the global demand slump.
The apparel export industry provides employment to about 3.5 million workers directly and another three million indirectly.
Source : The Economic Times