India: Demand recession haunts TN powerloom clusters
[2008-5-19]
Grey fabric producers in the decentralised powerloom clusters in Coimbatore are feeling the heat of demand recession bugging the textile value chain. The slow business enquiries and surge in input costs confronting the weavers in the production centres of Palladam, Somanur and Avinashi/Tirupur in recent times have made most of them wary on the adverse trade fallout if they continued their operation. The cluster leaders and their respective local trade bodies in Palladam-Somanur-Tirupur, which together accounts for about two lakh powerloom units, are debating the use of calling a longer and;work-stoppage; as a strategy to tide over the adverse working condition. "We face a drastic fall in indents for fabric production placed by wholesale trade/master-weavers, particularly in the last two months. The slow demand is the sharpest in the last three years," says Mr A.
Chinnasamy, president of the Palladam Thaluka Powerloom Textile Traders Association, a body predominantly representing the local textile traders who hire weaving capacities from job-work units and supply the finished grey fabrics for merchant exporters from upmarket. Mr Chinnasamy grouse is that the rising prices of raw cotton/cotton yarn, a key input, at one end and the dwindling production orders for grey sheets at the other end have brought a squeeze on their margins, rendering the working of their clans very difficult. "Textile producers owning their own looms may be in a position to offer a price discount, say from 50 paise to Re 1 per metre of grey fabric, to retain orders; whereas that luxury is denied to us as we have to absorb the conversion charges ranging from Rs 2 to Rs 4 per metre incurred on production outsourced," Mr Chinnaswamy added.
Chinnasamy, president of the Palladam Thaluka Powerloom Textile Traders Association, a body predominantly representing the local textile traders who hire weaving capacities from job-work units and supply the finished grey fabrics for merchant exporters from upmarket. Mr Chinnasamy grouse is that the rising prices of raw cotton/cotton yarn, a key input, at one end and the dwindling production orders for grey sheets at the other end have brought a squeeze on their margins, rendering the working of their clans very difficult. "Textile producers owning their own looms may be in a position to offer a price discount, say from 50 paise to Re 1 per metre of grey fabric, to retain orders; whereas that luxury is denied to us as we have to absorb the conversion charges ranging from Rs 2 to Rs 4 per metre incurred on production outsourced," Mr Chinnaswamy added.
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