The Powerloom Development and Export Promotion Council (PDEXCIL) recently came out with demanding a fair mechanism for ensuring that yarn prices stabilize and stay constant over a period of time to ensure that the micro and small medium entrepreneurs in the Powerloom industry are not faced with hardships of absorbing exorbitant cost burdens. PDEXCIL, which is a government body under the aegis of Ministry of textiles, came up with this demand after receiving complaints from several powerloom operators in the industry.
“Recently the powerloom sector is facing difficulties for its survival due to frequent fluctuation in the yarn prices. The production cost of fabric is mainly dependent on the yarn prices, which is the main raw material for conversion to fabrics. Besides, increase in the cost of logistics and electricity tariff also add to the input cost. This results in the increase of cost of production by atleast 30-35 per cent. However, due to sluggish demand of fabrics in domestic market as well as decline in export, manufacturers are unable to absorb the burden of such price rise. This has reduced their profit margin and they find it difficult even to achieve a breakeven,” the report stated. Increase in yarn prices accentuates this problem and small entrepreneurs might be forced to shut shop in the near future if this problem is not addressed adequately, the release concluded