Surat weaving units cut production, take 2-day week offs as polyester yarn prices surge

Surat’s weaving industry has begun voluntarily curtailing production as a sharp rise in polyester yarn prices, driven partly by disruptions linked to the West Asia conflict, has made fabric manufacturing financially unviable, industry representatives said on Sunday.

Around 1.5 lakh powerlooms have adopted production cuts, with some units observing a two-day holiday each week while others have reduced shifts, said Vishnubhai Patel, former vice-president of the Federation of Gujarat Weavers Welfare Association (FOGWA).

Surat is one of India’s major textile hubs, with around 7 lakh to 8 lakh weaving units that generally operate round the clock in shifts. The production cuts could affect the earnings of 40,000 to 50,000 workers, industry representatives said.

“The price of yarn and other raw materials has increased sharply in recent months. We purchased yarn at high rates, but we are not getting a corresponding price for the finished grey fabric because traders are also unable to sell it at higher prices in the market,” Patel told PTI.

Yarn prices squeeze margins

According to Patel, polyester yarn prices have risen from around Rs 112 per kg to Rs 140 per kg, an increase of about 25 to 30 per cent.

He said the increase had significantly altered production costs, but manufacturers had been unable to pass the full increase on to buyers.

“Our grey fabric, which earlier cost around Rs 16 per metre, should have become costlier by around Rs 5 after such an increase in yarn prices. But the market has accepted an increase of only around Re 1 to Rs 1.50,” he said.

Patel alleged that yarn manufacturers had increased prices by more than what could be justified by higher input costs, although he said it was for the authorities to examine whether there was any cartelisation.

The West Asia conflict has contributed to volatility in crude oil prices and the cost of key inputs such as purified terephthalic acid (PTA) and monoethylene glycol (MEG), he said.

PTA and MEG are derived from crude oil and are key raw materials used in polyester yarn production. Weavers subsequently use the yarn to manufacture fabric.

Units opt for voluntary cuts

With production costs rising while fabric prices remain under pressure, weaving associations have advised units to reduce production temporarily rather than continue purchasing yarn at elevated prices.

“Nobody is being forced to shut down. It is entirely voluntary and depends on the feasibility of individual units,” Patel said.

Some units are observing a two-day holiday every week, while others have reduced production by one shift. Patel said he had also cut one shift at his own unit.

FOGWA has advised weaving units to slow production for the next month in the hope that yarn prices will stabilise.

“The industry wants to keep running, but at the current yarn rates, the costing does not work. We are therefore left with no option but to cut shifts or take voluntary holidays,” Patel said.

Workers face lower earnings

The production cuts are also expected to affect workers, particularly those whose earnings depend on the amount of work available.

Patel said the industry was already facing a labour shortage, with many migrant workers from Uttar Pradesh and Odisha yet to return fully.

FOGWA president Ashok Jirawala said industry bodies had approached the government over the rise in yarn prices and sought action against what he described as an artificial increase by manufacturers.

“If crude prices go up, an increase can be understood, but when crude has not increased proportionately, such a sharp hike in yarn rates makes no sense,” Jirawala said.

The industry has also sought relief through lower customs duties on yarn and its raw materials to reduce input costs, he said.