AHMEDABAD: Surat's textile industry is facing a deepening crisis as soaring yarn prices and rising production costs squeeze thousands of weaving units across Gujarat.
Industry representatives said yarn prices have increased by 40-45% over the past two months, while grey fabric prices have risen by only about 10%, leaving weavers unable to recover the sharp rise in input costs.
The crisis has hit small weavers the hardest. Of Surat's estimated 50,000 weavers, around 70% are small-scale unit owners, many of whom are struggling to repay bank loans amid shrinking margins and weak cash flow.
Adding to the pressure, electricity, labour, coal, transport and rental costs have also increased, while weaving charges have largely remained unchanged.
Weavers also face delayed payments from traders, often receiving dues only after 60 to 120 days. In contrast, yarn dealers reportedly charge 1.5% monthly interest, or 18% annually, on delayed payments, worsening the financial burden on small units.
Mahendra Ramoliya, veteran industrialist and director of Sachin GIDC, said the sharp rise in yarn prices, which he linked to crude oil costs and what he described as a "cartel or syndicate" among yarn producers, has pushed thousands of weavers into financial distress. He said the mismatch between yarn and grey fabric prices has resulted in heavy losses for weaving units.
Several small weaving units have reportedly started observing weekly holidays to reduce losses, while others are struggling to continue regular production. Industry members fear that if the situation continues, many units may be forced to shut down for a month or longer during the Diwali season.
Weavers have called a meeting on September 25 to discuss measures to contain losses. The industry is expected to submit a representation to the Gujarat government seeking intervention to address the rising cost and pricing pressures.