Crude oil price rise keeps Surat weavers on tenterhooks

SURAT: The rising crude oil price has started worrying textile entrepreneurs in the country's biggest man-made fabric (MMF) hub of Surat. As crude oil price rose in Asia due to continuous violence in Iraq, yarn manufacturers have increased the prices of yarn by Rs 4 per kilogram.
Polyester yarn is the basic raw material for Surat's MMF sector. With the anti-dumping duty on yarn in place, the local weavers in the powerloom sector have to heavily depend on domestic manufacturers.
Around 6.5 lakh powerloom machines weave more than 3 crore metre of fabric per day in the city. The textile traders in the country's biggest wholesale market sell around Rs 110 crore worth of fabrics, including finished saris, dress materials, home furnishing fabrics etc.
The rising crude oil prices and the Union Ministry of Commerce and Industry's anti-dumping duty on Purified Terephthalic Acid (PTA) — a raw material derived from crude oil to manufacture yarn chips — are weighing heavy on Indian polyester industry. The levy was imposed on June 19.
Industry sources said the polyester yarn prices are likely to increase in the coming days with local spinners finding it difficult to adjust the escalating cost of procuring the raw material required to manufacture the polyester yarn. This will have a cascading effect on MMF fabric prices. The prices of saris and dress materials are likely to witness an increase of at least 20 per cent, they added.
Ramesh Godsewala, a yarn expert, told TOI, "The crude oil price rise has a direct impact on the MMF industry. At present, the crude prices are between $115 to $120 per barrel, which is likely to increase up to $200 per barrel with the Iraq crisis not likely to die down soon. The weavers will have to pass on the price rise in polyester yarn to the textile traders, which in turn will make the finished fabrics like saris and dress materials costlier."
Ashok Jirawala, president, Federation of Gujarat Weavers Association, said, "We only hope the crude oil prices come down soon, or else the weaving sector would face tough days. There is a shortage of workers and the weavers will not be able to cope up with the rise in yarn prices."