Hosiery makers have been caught on the wrong foot with the sudden rise in prices of cotton yarn, which have hit a lifetime high because of short supply and rising global demand.

While the price of raw cotton has risen by 30-35 per cent, driven by an increase in minimum support price by the government, the surge in cotton yarn rates was more than 50 per cent.

The situation has resulted in severe cash flow problems for smaller hosiery makers, who are mostly concentrated in Tirupur, Tamil Nadu and Bengal. A token strike has been called by all associations of the garment makers in Tirupur on Monday.

“We have written to the finance minister and Union textile minister to look into the steep rise in cotton yarn prices which is impacting most of the MSMEs,” Vinod Kumar Gupta, managing director of Dollar Industries, said.

The hosiery industry is estimated to be Rs 30,000 crore a year. Only a third of the players are in the organised sector.

Udit Todi, director of Lux Industries, said there is a shortage in supply of cotton yarn in the domestic market due to export demand. “It is a seller’s market. Sometimes it is not possible to get the desired quantity and quality despite paying high prices,” he said.

Companies have already raised prices by 4-5 per cent.

The prices of synthetic yarn — spandex — has also gone up substantially in the last one year.