Banks must support MSMEs: Knitwear sector

COIMBATORE: The Tirupur knitwear sector has requested banks to extend necessary support to MSMEs to tide over the liquidity crisis in the wake of rising yarn and cotton prices.

“One and a half years ago, one kg of yarn could be bought for Rs 200, whereas now with the same amount, only 400 grams could be bought. This price rise has brought immense financial stress on the operational front. As an impact of the liquidity crisis, the rest of orders have also got struck up in the pipeline,” said Raja M Shanmugham, president of Tirupur Exporters Association (TEA), in a petition to Dinesh Kumar Khara, chairman of State Bank of India in Mumbai.

The knitwear sector intended to drive home the point that price escalation cannot be easily equated with price realisation as it takes its own time.

Meanwhile, Ravi Sam, chairman of Southern India Mills’ Association (SIMA), has appealed to all the stakeholders in the value chain to stand united to mitigate the grave crisis rather than demanding the government to take certain short cited policy decisions like banning or imposing quantitative restrictions on cotton and yarn exports that would tarnish the image of the nation as a reliable supplier in the global market.

He also urged the government to launch ‘Technology Mission on Cotton 2.0’ on a war footing as cotton productivity level that prevailed at 565 kg per hectare has now dwindled to 460 kg. He pointed out that the scheme is urgently required to protect the livelihood of 65 lakh farmers, who are struggling with over 1,500 uncertified and outdated technology seeds and over three crore people directly employed in the cotton textile value chain.