Textile weavers in Surat have voiced concern over persistently high yarn prices, noting that rates have not eased despite the Centre’s decision to exempt 40 petrochemical products from customs duty.
Weavers argue that yarn manufacturers quickly hike prices when input costs rise but are slow to reduce them when raw material prices fall. According to them, the sustained increase in yarn costs has significantly impacted production levels and profit margins across the weaving sector.
Yarn manufacturers, however, maintain that the duty exemption alone does not dictate pricing. They attribute current price levels to multiple factors, including fluctuations in the US dollar and global geopolitical developments. Manufacturers also contend that yarn continues to be traded at prevailing market rates and that there has been no widespread resistance from buyers.
The situation has begun to affect operations on the ground. Faced with rising input costs and a shortage of cooking gas for workers, several weaving units have cut back to single-shift operations or shut down for a couple of days each week. Industry representatives say some units under severe financial strain have already reduced output.
Weak demand for textile products has further worsened the outlook. Industry leaders note that the combination of high input costs and sluggish demand has forced many weavers to scale back production.
Weavers warn that if the current pressures on costs and labour conditions persist, overall output could decline further in the coming weeks. One weaving unit owner said yarn prices should be corrected more quickly during downturns, adding that reductions tend to lag behind falling raw material costs.
In response, a yarn manufacturer said pricing adjustments are made in line with rapidly changing market dynamics. He noted that raw material prices and currency movements now fluctuate more frequently than before, leaving manufacturers operating on tighter margins as well.
