Most of Indian home textile exports are USA which is facing supply-chain disruption problems on account of US Truckers issue. Adding fuel to the fire is the ocean freight costs which have tripled in the spot market on account of container shortage globally. Further, increasing costs from freight demurrage and port congestions etc is adding further to exporters woes.
Lately, demand for Indian cotton and yarn has increased due to the ban on Xinjiang Cotton which used to meet 20% of global supply. This has led to their prices increasing more than three times in the last one year. The cotton rates have gone north of Rs 1,00,000/candy. Demand for cotton is strong on account of robust domestic and international demand from countries such as Bangladesh, Vietnam, etc. Although the industry doesn’t expect the price to go back to historical levels, it might see some respite during post current harvest season.
Above all, the western economies are experiencing high inflation levels and resultant rate hikes have a dampening effect on demand in general. Higher freight and logistics costs are further adding fuel to fire. Also, post-Covid as consumer spending on other outdoor experiences and expenses have increased which might have reduced the share of expense on home products which is also affecting demand for home textiles.
However, the industry feels the current situation is a temporary phenomenon which may continue for few more months. After that industry hopes to make good the lost revenue.