Global Tensions and Surging Crude Oil Prices Disrupt Surat Textile Industry
Surat: The escalating war-like situation involving the United States, Israel, and Iran has started to impact the international market and the textile industry in Surat. A sharp rise in crude oil prices has led to a rapid increase in the cost of various types of yarn, while immediate deliveries have become unavailable. This situation has made it increasingly difficult for weavers to manufacture grey cloth.
Weavers leader and Sachin Industrial Society secretary Mayur Golwala suggested that if weavers are unable to bear the manufacturing costs of grey cloth under the current circumstances, it would be more practical for them to halt production and observe a holiday for two to three days a week. He urged the government to ensure the availability of affordable and high-quality imported yarn to keep the weaving industry operational and protect the jobs of thousands of workers, as per agency report.
Golwala pointed out that the price of crude oil, which is the primary raw material for manufacturing yarn, surged from approximately 73 dollars on March 4 to around 100 dollars. This sudden price hike has caused significant losses in Surat, which serves as a major hub for man-made fibre textile manufacturing and consumes thousands of tons of polyester, viscose, and nylon yarn daily. Over the past week to ten days, spinners have raised the price of polyester yarn by about 20 rupees per kilogram, while the prices of nylon mother yarn and filament yarn have increased by 25 to 30 rupees per kilogram. The anxiety among weavers further deepened on Monday when nylon spinners sent messages in the open market announcing a halt in yarn sales.
Spinners have reportedly been determining yarn prices based on international crude oil rates for the past week, strictly on the condition of ready delivery. This practice has escalated the capital costs for weavers, who typically operate on a 30-day payment cycle with grey cloth merchants. Golwala alleged that certain spinners are attempting to restrict yarn supply and inflate prices by forming an artificial cartel. Preparations are currently underway to lodge a formal complaint with the Competition Commission of India in the near future to ensure strict action against such practices.
Addressing the demands made by some nylon spinners to impose a minimum import price or anti-dumping duty on imported nylon yarn, Golwala argued that such measures would harm the interests of thousands of small weavers. He cautioned that restricting imported nylon yarn could lead to a market monopoly for a select few spinners, thereby weakening the financial standing of smaller weavers. He appealed to the government to prioritize the welfare of small weavers and implement relief measures for the industry rather than imposing restrictions on imported yarn.
