Industry group the Tirupur Exporters Association (TEA) has condemned what it says are steep yarn price hikes from textile producers.

At an extraordinary general meeting convened this week by the association and attended by 110 Indian exporters, TEA president Shri Sakthivel highlighted his view that textile mills were frequently revising yarn prices upwards.

The president also made clear his opinion that mills could have increased cotton yarn prices in proportion to the rise in cotton prices as well as add a margin for power and labour, but cited an abnormal increase in yarn prices "without correlation to the rise in yarn input cost."

TEA also resolved to suggest a contract with garment exporters for a period of three months to maintain the same yarn prices.  The resolution added: "The yarn prices should not be increased in the middle of the month and ensure continuous supply.

"In future, there should not be any increase in yarn prices since the mills have already increased the prices abnormally."
However, the Southern India Mills Association (SIMA) said planned increases in customs and excise duties on petroleum products would "seriously affect the textile industry as the industry has been facing severe power shortages in states like Tamil Nadu to the tune of 45% and would further increase power cost."

SIMA added the industry had been demanding a working capital assistance at an interest rate of 7% and a nine months credit period to procure raw cotton "during the season" and also to have a "level playing field" with the multinational cotton traders.

Established in 1990, TEA comprises 672 life members and 155 associate members.

Formed in 1933, SIMA has 375 textile mill members spread across the states of Andhra Pradesh, Karnataka, Kerala, Pondicherry and Tamilnadu.

SIMA member mills together produced 25% of total cotton yarn manufactured in the country.

Some 50% of cotton yarn exported from India originates from southern textile mills.