With the chemical prices stabilising post-Olympics, textile processing firms in Gujarat have found some respite. Almost on the verge of closure, the processing industry is finding its ground back.
Stringent measures by the Chinese government had taken a toll on supply of dyestuff and chemicals, raising the domestic prices. This has forced the textile processing industry in Gujarat to cut down production by atleast 30 per cent for few months.
However, with the Olympics getting over, the chemical industry in China is back in business, thereby easing prices for the domestic industry.
“Processing units were on the verge of closure sometime back due to rising chemicals and dyestuff prices. Now that the Olympics is over, things have eased back and processing houses are now able to do better,” said Devkishan Manghani, general secretary of Federation of Surat Textile Traders Association (FOSTTA).
The cut in production by processing houses had also slackened weaving business since units were unable to sell their fabric to processing houses.
According to Manghani, prices of dyestuff and chemicals had risen by 45 per cent to almost 100 per cent in some cases. “The prices have now come down by atleast 50 per cent in cases of some chemicals,” he added.
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Surat, which remains the processing hub of Gujarat, houses around 450 processing units. Chemicals and dyestuff form anywhere between 15 per cent and 20 per cent of the total costs for these units.
Apart from chemicals, even the crude oil prices have been affecting the processing industry.
“The skyrocketing crude oil prices had also led to tremendous increase in fuel costs for every sector including processing houses. These houses had begun gradually cutting down on buying grey fabric by 30-40 per cent which in turn led to a glut in the weaving units,” said Manghani.