Apparel exporters are apprehensive about achieving the target of USD 12 billion for 2010-11, as overseas shipments 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 8 per cent. But we hope that we can cross last fiscal's figures of USD 10.72 billion," Apparel Export Promotion Council (AEPC) Chairman Premal Udani has said.

Garment exports in the first quarter of this financial year saw a negative growth. During April-July, exports dipped by 8 per cent to USD 3.4 billion on year-on-year basis.

Udani said that with reduced demand from western markets like the US and Europe, the next quarter also looked unpromising.

To reduce the dependence on traditional markets like the US and Europe, apparel exporters are exploring new markets in Japan, West Asia, Africa and Australia.

The 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.

The prices of cotton/yarn have started sharply rising again 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 are climbing fast.

"Yarn mills have once again stopped deliveries and are planning to increase minimum Rs 10 per kg price for September delivery," he added.

Earlier, the government had announced that the Rs 2,500 per tonne export duty on cotton was being withdrawn and the Textiles Commissioner would start registration of mandatory cotton contracts from September 1.

Further, Udani said there were also labour law problems which did not give exporters the flexibility they need.