Apparel exporters are apprehensive about achieving the target of $12 billion for 2010-11, as overseas shipments have declined for three months in a row, with little signs of improvement in the coming months.
“In the first quarter, apparel exports were cumulatively down by eight per cent. But, we hope that we can cross last financial year’s figures of $10.72 billion,” Apparel Export Promotion Council (AEPC) Chairman Premal Udani said.
Garment exports in the first quarter of this financial year saw a decline. During April-July, exports dipped by eight per cent to $3.4 billion on a yearly basis.
Udani said with reduced demand from western markets like the US and Europe, the next quarter did not look promising either.
To reduce dependence on traditional markets of the west, apparel exporters are exploring new markets in Japan, West Asia, Africa and Australia.
APEC has also asked the government to ensure that exports of cotton and yarn are calibrated and do not cause supply disruptions for producers of garments for export and domestic markets.
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The prices of cotton and yarn had again started rising sharply due to the government’s decision to allow exports from October 1 and the withdrawal of export duty on cotton, the council said.
Cotton prices have increased by 55 per cent between July 2009 and August 2010.
Udani said the cost of production was going up because raw material costs were climbing fast. “Yarn mills have once again stopped deliveries and are planning to increase the price by at least Rs10 per kg for September delivery,” he added.
Earlier, government had announced the Rs2,500-per-tonne export duty on cotton was being withdrawn and the textiles commissioner would start registration of mandatory cotton contracts from September 1.