Ahmedabad: The ongoing conflict in West Asia is casting its shadow on the textile sector in Surat, leaving industry leaders worried with shipping costs going up to 400%, payments getting delayed and raw material cost rising.
While the price of manmade fibre has shot up at least by ₹10-15 per kilogram, Iran’s stranglehold on the Hormuz Strait and subsequent impact on crude oil prices is likely to push prices up significantly, maintain textile industry sources in Surat. Surat is the second largest manufacturing hub of synthetic yarn globally, producing more than 6 crore metres of fabric per day.
“As of now, on one hand, our materials are stuck in ships, which means expected payments are delayed, and on the other, the cost of raw material is rising fast, which would not only impact international supply but the domestic markets as well,” said Ashok Jeerawala, president of Surat Weavers Association.
Jeerawala estimated that the industry is looking at an immediate revenue crisis of ₹300-400 crore due to the war. “Our narrow yarn (laces) go to both Iran and Israel,” said Ashish Gujarati, former president of the South Gujarat Chamber of Commerce. “While the war has dealt a crushing blow on these supplies, Iran’s attack on Dubai has destabilised the supply chain to Africa as well.
“Normally, traders in Dubai import from us, and they route the product to Africa, but with the given situation, even that has come to a halt,” Gujarati said, adding that the conflict has also resulted in a massive enhancement in shipping charges. “Shipping charges have gone up to 400% as people are really not ready to venture into the troubled waters at this point,” he added.
“As it is, we were dealing with a slow market for quite some time, and now this war has dealt a major blow to the industry,” said Haribhai Kathiria, another textile merchant from Surat. “While now, labourers from UP, Bihar, and other states have gone back to their home states for the festivals, we are not sure what the circumstances will be when they return,” he said.