Soaring yarn prices hit weaving units in Ahmedabad

Production down by 25%

The unabated rally in yarn prices seems to have taken its toll on weaving units operating in Ahmedabad. Sandwiched between spiralling raw material (yarn) cost and limited rise in grey cloth prices, city-based weaving units have been forced to cut production by 25 per cent.

As per the data provided by Ahmedabad Powerloom Owners' Association (APOA), which represents 70 to 80 percent weaving units in the city, the weaving units' output has come down to 5 to 6 lakh meters per day at present from a normal production of 7-8 lakh meters per day.

"The daily production of grey cloth in the city has fallen by 25 per cent largely due to surging prices of various types of yarns," said Navin Patel, president, Ahmedabad Poweloom Owners' Association.

 

The yarn prices have firmed up substantially during last two quarters. The raw material cost has increased by 40 per cent, while grey cloth prices have not move up in proportion to firm yarn prices. This has hit the weavers, especially small scale units, in Ahmedabad, which houses 10,000-12,000 powerlooms.

"The current yarn prices are unaffordable for weavers since they are not able to pass on the rise to grey cloth buyers. The demand for grey cloth is not encouraging as overall the textile market has not picked up," added Gangaram Patel, secretary, APOA.

Weaving industry players believe that the grey cloth production can further decline if the yarn prices continue to fall further.

In the wake of higher cotton prices, cotton yarn has been moving northwards for last two quarters. "Since February end, cotton yarn prices have jumped by Rs 20 per kg due to higher cotton prices and power shortage in Southern parts of the country," said Bharat Malkan of IB Yarn Agency.

It may be mentioned here that prices of Shankar-6 variety of cotton in Gujarat have currently galloped to Rs 28,700 per candy, which were hovering around Rs 21,000 to Rs 22,000 per candy at the onset of the season.