Crude Spike Could Push Textile Prices Up 20%
Crude price spike threaten 20% rise in textile pricesSurat: A surge in crude oil and coal prices, triggered by global tensions, is squeezing Surat's textile industry, pushing up production costs and raising concerns of a steep rise in the prices of sarees, dress materials and garments.Industry players said MMF prices could rise by around 20% as the cost of chemicals, yarn, weaving and processing has increased in recent days. Surat, which has a daily production capacity of around 6 crore metres of greige fabric, is already witnessing the impact of rising input costs and weak market demand.Crude oil, which was trading at around $75 a barrel a week ago, surged to $120 a barrel on Monday, before dropping sharply to about $92. The volatility has directly impacted petroleum-based yarn products, particularly polyester and nylon. In several yarn categories, prices have increased by Rs 10 to Rs 30 per kg, adding to the burden on manufacturers."There is a sharp rise in yarn prices and, in the current scenario, weavers prefer to stop buying and observe a holiday for one or two days a week. For a small weaver, it is not affordable to continue business in such conditions," said Mayur Golwala, secretary of Sachin Industrial Society.Weaving units in Surat are buying yarn cautiously at higher prices as fabric demand remains weak. "Yarn prices are rising due to higher raw material costs, while fabric demand is low, so we are not getting good prices. Major markets like Dubai are also stagnant, limiting orders," said Vijay Mevawala, former president of the Southern Gujarat Chamber of Commerce and Industry (SGCCI)."The cost of yarn manufacturing is rising due to the war and increasing crude prices. These prices depend largely on international factors," said Himanshu Jariwala, a yarn manufacturer.Traders said the market is unusually slow at a time when production typically gathers pace ahead of the festive season, when demand for textile products generally rises. "There is already slow business in textiles at present. If the situation continues, it could push finished product prices up by at least 20%," said Kailash Hakim, president of the Federation of Textile Traders Association (FOSTTA) Forum.The pressure has intensified further with coal prices rising by nearly 35% over the past 15 days. Textile processors, who depend heavily on coal for operations, have started increasing processing charges to offset the higher fuel costs.read more :- Textile recycling market in India estimated at $3.5 billion by 2030
