Tirupur Elastic Industry Announces 25% Price Hike Amid Raw Material Crisis
The Tirupur Elastic Manufacturers and Traders Association has declared a significant 25% increase in elastic prices, effective from March 18, 2024. This decision comes in response to a sharp escalation in raw material costs, which industry leaders attribute to ongoing geopolitical tensions in West Asia, including conflicts involving Israel and Iran.
Emergency Measures: Production Cuts and Potential Shutdown
During an emergency general body meeting held on Tuesday, the association resolved to implement drastic measures to cope with the financial strain. Starting Wednesday, production will be reduced by 50%. If the situation does not improve, a complete operational halt is scheduled for March 25, 2024.
Tirupur, a critical hub for India's undergarment manufacturing sector, generates an annual turnover of approximately Rs 10,000 crore from both export and domestic markets. Elastic is an essential accessory in this industry, with manufacturing concentrated in Surat, Kolkata, and Tirupur. Around 200 units operate in Tirupur alone, providing direct and indirect employment to over 10,000 workers.
Root Causes: Soaring Raw Material Prices
Association President R P Govindasamy explained that the industry is under severe stress due to skyrocketing input costs. "Rubber prices have surged by 15%, and polyester yarn has jumped by 35%, pushing the sector toward a crisis," he stated.
The price details are alarming:
- Polyester yarn, previously priced at Rs 103–104 per kg, now sells at Rs 135–137 per kg.
- Rubber prices have increased from Rs 235 per kg to Rs 280 per kg.
Govindasamy added, "With prices rising by Rs 6–7 daily, it has become impossible to accept new orders." The volatility, compounded by a shortage of dyed yarn for woven elastic and LPG constraints disrupting heat-setting processes, has further inflated costs and hampered production.
Composition and Broader Impact
Elastic production relies heavily on polyester yarn (60%) and rubber (40%), making the spike in these materials particularly damaging. Despite some exporters reducing their margins to support manufacturers, the industry is prioritizing emergency shipment orders using limited LPG stocks.
The LPG shortage has also affected workers, many of whom are migrants from other districts and states, as units struggle to arrange adequate food facilities.
Govindasamy emphasized the broader implications, noting that even minor components like elastic are crucial. "A pyjama stitched at Rs 194 is incomplete without elastic worth Rs 6. Any disruption in elastic supply will ripple through the entire garment supply chain," he warned, highlighting the risk of significant job losses if the crisis persists.
The association's actions underscore the vulnerability of India's textile sector to global raw material fluctuations and geopolitical events, with potential consequences for both domestic and international markets.
