Yarn 35% more expensive, cloth demand drops; crisis hits Bhivandi's powerloom industry

City News Mumbai / Gani Khan

The powerloom industry in Bhivandi appears to be caught in a serious crisis once again. Despite yarn prices rising by about 35 % in the past two months, the price of cloth has not seen any significant increase. As a result, the cost of fabric production has become higher than the selling price. With demand and purchases of cloth falling amid the recession, loom owners’ difficulties are continuously growing.

Millions of people depend directly and indirectly on the powerlooms in Bhivandi. The continuously rising yarn prices and weak demand for finished garments have impacted the entire textile sector’s economy. Loom owners say that if the current situation persists for a long time, they will have no option but to shut down their factories.

According to Kaushal Jha, owner of Lakshmi Narayan Traders, the yarn that cost about ₹210 per kilogram two months ago is now ₹270 per kilogram. He said the price of 60‑carded cotton yarn, five kilograms, has risen from ₹1,050 to ₹1,350. Meanwhile, the price of 60‑combed yarn has gone from ₹1,250 to ₹1,500, and the price of 40‑carded yarn has increased from ₹190 per kilogram to ₹220 per kilogram.

Rakesh Kesrwani, owner of RK Textiles, reported that prices have surged for almost every quality of yarn. This has directly affected the cost of fabric production. On the other hand, cloth prices in the market have remained at their previous levels.

VL Textiles owner Shrinivas Vallal and AA Yarn owner Deepak Sarawgi said that the higher yarn cost has significantly raised production expenses. According to them, fabric that costs about ₹26 per meter to produce is being sold in the market at roughly ₹24 per meter.

According to traders, even though yarn prices have risen, buyers of cloth are not willing to increase the selling price. Consequently, loom owners are forced to produce fabric at a loss. Finished goods are being stocked to preserve workers’ employment, but there is uncertainty about when they will be sold.

Loom owners say that continuously operating at a loss is becoming increasingly difficult. First, money has to be spent to purchase yarn, and then it takes time for the finished fabric to sell. This ties up capital in the business.

Traders have warned that if yarn prices do not come down and cloth prices do not rise, many loom factories may have to close. They say they no longer have the capacity to absorb ongoing losses, nor the ability to inject fresh capital into the business.

Bhivandi has a large network of powerloom units. A single loom machine can produce an average of 50 to 60 meters of fabric in 24 hours. According to traders, millions of meters of cloth are produced daily here. Because yarn is expensive and the sale of finished goods is slow, a large quantity of fabric is accumulating in stock.

Traders allege that middlemen in the yarn market…