Powerloom Sector May Get Affected As Polyester Filament Yarn Prices Hiked By Rs 30 Per Kilogram

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Powerloom Sector May Get Affected As Polyester Filament Yarn Prices Hiked By Rs 30 Per Kilogram

Surat’s powerloom industry is staring at another possible slowdown after demonetisation, especially since front-line polyester filament yarn spinners have increased yarn prices by almost Rs 30 per kilogram in the last one month.

According to industry sources, this seems to be one of the highest ever increases in yarn prices by the spinners in recent history. A powerloom weaver said that such unprecedented hike in yarn prices defies all logic as demand for yarn has not picked up after the demonetisation.

"The industry can't survive if spinners try to rule the market through a price cartel and will result in further unemployment across the sector. We request the textile ministry to intervene or else lift anti-dumping duty on import of yarns,” another industry source said.

The Surat-based industry has suffered major losses due to closure of over 70% of weaving units after the demonetisation drive. Now while production units are coming back to operation gradually, the abnormal hike in yarn price would certainly affect the industry. As per industry estimates, there are around 6.5 lakh powerloom machines manufacturing around four crore metres of fabric per annum worth over Rs 30,000 crore. After demonetisation, production of fabric reduced to merely 1.5 crore metres due to closure of a majority of powerloom units.

Powerloom weavers stated that the industry is preparing for the forthcoming marriage season in summer. However, weavers who wish to replenish their yarn stock are in deep trouble after spinners increased yarn prices, sources said. Polyester yarn prices increased after substantial hike in their raw material prices in January. Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG) prices have soared due to strong crude oil price and supply shortages which has eventually resulted in higher polyester yarn price. Also, there is anti-dumping duty on imports of some variety of polyester yarns and therefore, local yarn spinners enjoy a protected market leaving the powerloom weavers with no choice but to consume local yarns.