The Hindu Business Line : Grey fabric units in TN mull production stoppage

"We are planning to call a meeting of our members to discuss ways to counter the current demand slide in the grey fabric market and the hardening prices of fabric," said Mr Easwaramurthy, President of the Coimbatore District Powerloom Cloth Manufacturers Association.

Though a sluggish market is not a new phenomenon for the powerloom weavers in the Somanur-Avanashi-Palladam belt in Coimbatore, the continued price pressure on the grey sheeting manufactured by them in recent months is worrying them the most, said Mr Jitender, a powerloom grey cloth indenting agent from Delhi.

"Every week, there is a drop in price from 25-30 paise per metre of grey fabric, as buyers are increasingly pounded by larger supplies," said Mr Jitender. He regularly sources unprocessed fabric from Tamil Nadu and supplies it to garment exporters and fabric traders in the northern textile processing centres.

The fall in price for grey fabric of 20s/30s/40s count and 30s dyed fabric has been rather sharp in the recent weeks, forcing the powerloom weavers to slow production.

Mr Jitender said rains in the North has affected the processing activities in key textile processing centres in Mumbai, Gujarat and Kanpur and depressed the fabric off-take.

The confusion over VAT among textile producing States too has added to the price instability , said Mr Jitender.

The textile processors in States having VAT managed to extract fiscal advantage over others and resorted to price undercutting.

Mr Duraiswamy of Surya Cotton, producer and exporter of grey and printed fabric made from powerlooms, said the trade dynamics of powerloom-made grey fabrics had changed in the past four months leading to a sharp decline in fabric offtake.

While he is not sure of the implications of `cheap' fabric importation from China, Mr Durai said he suspected that fabric production in the Statehad increased in the last one year, thanks to the large number of newly installed weaving machines.

However, this had let off an excess supply in the market.

"The grey fabric production has gone up 25 per cent in these centres in the last one year due to the increase in the number of weaving machines in operation," he said adding that the non-implementation of VAT in Tamil Nadu too had negatively impacted the price parity for fabric produced in the State.

Lack of demand seems a worry only for the grey fabric producers as the yarn-dyed fabric producers of the same powerloom genre from the neighbouring Erode are relatively better off in terms of trade enquiries, especially for exports.

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