Bhiwandi Textile Industry Faces Crisis As Yarn Prices Surge 70%, Powerloom Units Struggle With Rising Costs

Bhiwandi: A steep rise in yarn prices since March has put the textile industry in Bhiwandi under growing financial pressure, with traders claiming that prices of several varieties have increased by 60-70 per cent in the past six months. The sharp increase in the cost of raw material has directly affected powerloom units and grey-fabric manufacturers, many of whom are struggling to maintain margins as finished-fabric prices have not increased proportionately.

Yarn Price Surge Impacts Powerloom Sector

Bhiwandi is one of Maharashtra's major powerloom and textile centres, with a large network of weaving, processing, trading and ancillary units. Traders fear that if the price imbalance continues, the impact could gradually spread across the entire textile supply chain.

Grey-fabric trader Bablu Thakur has urged the government to monitor the yarn market and investigate the reasons behind what traders describe as an unusual increase in prices. According to traders, the rise has been particularly sharp in several commonly used yarn varieties.

Shehzad Ansari, proprietor of Sadeya Textiles said the prices of different varieties had risen substantially. According to him, micro yarn has increased from Rs 109 to Rs 160 per kg, while full dull yarn has risen from Rs 118 to Rs 178. Polyester yarn, he said, has increased from Rs 150 to Rs 225, magic yarn from Rs 155 to Rs 235, and cotton yarn from Rs 270 to Rs 355 per kg.

Rehan Ansari proprietor, Ayyub Textile From February to September, the prices of micro and polyester yarn have increased by nearly 50 per cent, while finished fabric is still being sold at around 30 per cent below the production cost. With input costs rising sharply but realisations remaining so low, continuing in this business is becoming increasingly difficult.

Traders said manufacturers cannot pass on the entire increase in raw-material costs to buyers because the prices of finished grey fabric have not increased at the same pace. As a result, the difference between production costs and selling prices is putting pressure on the margins of weaving units.

Traders seek scrutiny of large market players

Firoz Nawab of Nawab Textiles has also raised questions about the role allegedly played by large agents and speculative traders in the yarn market. He alleged that some major traders operating from Mumbai and Gujarat had earned unusually high profits during the past six to seven months.

Nawab has sought scrutiny of the business activities, assets and financial transactions of such traders to determine whether any market manipulation or unfair trading practices have contributed to the price rise.

Imported fabric adds to manufacturers' concerns

Traders have also raised concerns over the import of finished fabric from China, Indonesia and Taiwan. According to industry representatives, imported fabric enters the Indian market through major textile trading centres such as Mumbai, Surat, Ahmedabad and Delhi.

They argue that domestic manufacturers are being squeezed from both sides by rising yarn prices on one hand and competition from imported finished fabric on the other.

Ehsan Ansari of Mahasagar Group, along with other traders, has urged the Centre to review the policy governing imports of finished fabric and take appropriate measures if any category of imports is found to be adversely affecting domestic manufacturers.

Industry representatives said announcements of new textile parks alone would not address the immediate difficulties being faced by existing manufacturing units. They want greater attention to production costs, market conditions, liquidity and employment in established textile clusters.

Concern over wider impact on textile chain

The industry fears that continued increases in yarn prices, coupled with subdued demand, could affect the entire textile ecosystem. Spinning mills could face weaker demand from manufacturers, while transporters, warehouses, dyeing units, processing houses and powerloom operators could subsequently feel the impact.

Nirav Seth of Kanhaiya Textiles said Bhiwandi, Surat, Ichalkaranji, Malegaon and Erode have thousands of small and medium-sized units dependent on the textile trade.

A large number of these units operate with loans and monthly instalment commitments, he said. If production costs continue to rise while realisations remain under pressure, their financial burden could increase further.

Demand for transparent yarn-price mechanism

Mahendra Bind of Maa Sheetla Transport, along with other industry representatives, has called for a transparent mechanism through which prevailing market prices of different yarn varieties can be monitored and made available to manufacturers.

Traders have also suggested that the government should monitor sharp and unexplained fluctuations in yarn prices and intervene where necessary. They said any evidence of artificial price escalation or unfair profiteering should be investigated before action is taken against those found responsible.

For Bhiwandi's textile industry, traders say the immediate challenge is to bridge the widening gap between raw-material costs and finished-fabric realisation. They want timely intervention to ensure that rising yarn prices do not eventually translate into reduced production, pressure on employment and greater financial stress for the thousands of small businesses dependent on the textile sector.

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