Yarn prices at an all time low in India but weavers show no interest

Leading spinners including Reliance Industries Limited (RIL), Indorama as well as the local spinning units in and around the Surat, the country’s biggest man-made fabric hub have reduced yarn prices by almost Rs 15 per kg in different categories in the last one and a half month to encourage sale of yarn in the textile industry, but there are no takers.

The powerloom weavers in Surat have stopped purchasing yarn, the basic raw material required in the production of polyester fabrics, due to overproduction and the upcoming festival season.

According to Industry sources, the weavers are facing the issue of overproduction and that the textile traders have been refusing to purchase unfinished fabrics as most of the festive orders have been delivered to the wholesale buyers across the country.

Yarn dealers in the market said that the spinners decreased yarn prices by almost Rs 9 per kg in September. In the last fortnight, the spinners have decreased prices by Rs 6 per kg in two different announcements.

The weavers have almost stopped new purchases of yarn due to overproduction. However, spinners are worried from the past two months as yarn purchase has decreased by almost 70%. The market is likely to pick up after the Diwali festival as per yarn expert Ramesh Godsawala.

Ashok Jirawala, president of Federation of Gujarat Weavers Association (FOGWA) said that the weaving sector is facing overproduction issue. Despite the fact that yarn prices are at an all-time low, no weaver is interested in stocking up raw material. Fresh purchase of raw material is likely to start only after Diwali festival.

Surat has more than 5.5 lakh powerloom machines manufacturing around three crore metre of unfinished fabric per day.

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