Synthetic textile manufactures are witnessing raw materials getting costilier by two to five percent over the past month due to a sharp increase in crude oil prices. IT is expected a further increase in prices of raw materials in the short term. Due to an increase in crude oil prices, polyester staple fibre prices have risen by 10 percent over the past two months to Rs 82 a kg.

Purified terephthalic acid (PTA) is a crude oil derivative and an input for polyester fibre increased by 4.5 percent in November alone. It was $692 a tonne on Tuesday. While, MEG (mono-ethylene glycol) has become costlier by 2.8 per cent in November, to $928 a tonne on Tuesday. Other raw materials have also become costlier.

S K Khandelia, president, Sutlej Textiles and Industries, largest manufacturer of coloured yarn in India said that China, a large producer for recycled polyester staple fibre produced from PET (polyethylene terephthalate) bottles, has stopped procurement of such bottles, resulting in a shortage of raw material for their fibre manufacturing plants. Hence, prices of recycled polyester staple fibre have gone up.

Companies in plastics are also impacted. Indo Rama Synthetics, India's largest polyester-only manufacturer, had a net loss of Rs 17.7 crore in the September quarter, compared to a loss of Rs 14.7 crore for the same quarter a year before.

O P Lohia, chairman of Indo Rama said that due to the cut in GST (goods and services tax) rates on some products from 18 percent to 12 percent has come as a relief for them. Also with growing demand for polyester products, they were able to pass on the raw material price hike to consumers.

Brent crude rose 15.2 percent in a month to its current $64.12 a barrel for spot delivery. This followed developments in Saudi Arabia and a rise in US-North Korea geopolitical tension.