Workers stitching garments at a knitwear export unit in Tiruppur.
Apparel exports contracted 21% last month to $988.72 million, from $1.25 billion in October 2021, according to provisional export data.
Of this, knitwear exports shrank 32.5% in dollar terms and 25.8% in rupee terms, with the knitwear hub of Tiruppur, registering an almost 40% contraction (in dollar terms) last month.
Knitwear exports contracted for the third straight month, according to the Tiruppur Exporters’ Association (TEA), with shipments from Tiruppur progressively shrinking month-on-month by 17.4%, 33.1% and 39.8% in August, September and October, respectively.
Average capacity utilisation at garment exporting units in Tiruppur was 30% now, observed Kumar Duraiswamy, joint secretary of TEA. The U.S., EU, and the U.K. account for 85% of shipments from Tiruppur. With high inflation in these economies, clothing was not a priority for consumers now, according to Mr. Duraiswamy. Further, with buyers saddled with huge stocks, they were postponing delivery. This had resulted in stocks piling up at the producers’ end.
“We have huge inventory of finished goods as the brands are asking us to defer shipments,” said a leading garment exporter in Tiruppur, speaking on the condition of anonymity. With buyers in the EU and the U.S. holding high inventory, and expectations of better sales during the Thanksgiving holidays and Christmas, orders were likely to revive only by January, the exporter added. Further, there was stress on pricing, with buyers asking for significant reductions in the per piece dollar rate, the exporter observed.
TEA’s Mr. Duraiswamy said the government had to step in and support the exporters.
An official in the Ministry of Textiles, who did not wish to be identified, said there were reports that orders from the U.S. had started reviving. While it was possibly only from a small set of buyers as of now, it did, however, signal prospects of an improved performance in the next quarter, the official added.
