The wholesale textile trade has been affected by the sudden hike in yarn price. Over Rs fifty crore worth of textile goods piled up with various wholesale and retail traders in Erode.

The prices of yarn have risen by Rs 40 per bundle that weighs around five kilogram. Because of the hike, the cost of production of the textile also increased.

This has necessitated the textile producers to increase the price of the textiles. However, the buyers are not willing to purchase the textile now that the prices have gone up.

The President of the Erode Handloom Cloth Merchants Association R.S.Natarasa Mudaliar said on Sunday, "More than 5 lakh powerlooms and 25000 handlooms are functioning in Erode and every day.

Buyers from all over the country are placing orders and physically visiting the textile shops buying huge quantity of textiles".

The gray cloth (Gada) is produced in powerlooms in Vellakoil, Nathakadaiyur, Vijayamangalam, Erode, Bhavani and Chennimalai area and sent to Ahamedabad and some other North Indian towns.

After converting it into lungis, the product is returned to Erode. The received product would be polished and packed.

But because of the increase in production cost the textile merchants have to increase the sale price.

The buyers who already had an agreement with the whole sale merchants for a particular price, refused to grant extra price for the product.

So the wholesale merchants are not dispatching the textile goods to the wholesale merchants of other areas.

Because of this the stocks of textile goods have started to pile up with the merchants in Erode, he said.

Added to this the sales in the Erode Textile Shandy have started declining due to the increase in price.

Even the sale of warm cloths are much below the expected level he said.

However, North Indian products are sold here for a low rate, as the yarn price is low in North India.

So Natarasa Mudaliar wanted the Tamilnadu Government to intervene in the yarn issue and fix the yarn price once in three months after having a discussion with the spinning mills.

If this is done they will survive, failing which it will necessitate them to stop their production of textile goods, he said.

The prices of yarn have risen by Rs. 40 a bundle

Even sale of warm cloths are below the expected level

Source: The Hindu