Yarn Prices Rise: SGCCI Seeks Price Monitoring Mechanism
SURAT : Rising yarn prices are squeezing Gujarat’s textile industry, prompting the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to seek government intervention to prevent what it...
SURAT : Rising yarn prices are squeezing Gujarat’s textile industry, prompting the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to seek government intervention to prevent what it described as arbitrary price increases by spinners. The issue was discussed at a meeting with senior officials of the Ministry of Textiles, where the Chamber demanded a transparent mechanism to monitor raw-material prices.
SGCCI pointed out that crude oil prices and melt prices were not moving in tandem. According to the Chamber, when crude was at $126 per barrel on April 30, melt was priced at Rs 109.63 per kg. With crude now at around $88-92, melt should be closer to Rs 95, but remains around Rs 105.93.
The Chamber further highlighted that crude stood at $72 per barrel on June 30 and rose to $92.74 on August 22. Based on the corresponding formula, melt should have been around Rs 97.81 per kg, against the prevailing Rs 105.73 — a difference of Rs 7.92 per kg.
SGCCI representatives argued that even when crude prices rise, the corresponding increase in melt should be limited. They said a rise of Rs 5 in crude should translate into only about Rs 2 per kg increase in melt.
“We have proposed a price monitoring committee comprising officials from the Ministry of Textiles, spinners and user industries so that prices are determined transparently,” the Chamber said.
The meeting was attended by Textile Ministry Joint Secretary Manisha Chatterjee, Commissioner Vrinda Desai, Kartik Danda, Textile Commissioner Tapan Raut, SGCCI president Ashok Jirawala, vice-president Raviraj Desai and Textile Task Force president Ashish Gujarati, among others.
The Chamber also sought zero customs duty on MEG, PTA, POY, FDY and DTY. It said yarn shipment freight had risen from around $1,000 to $4,000 per container and sought freight subsidy linked to prevailing prices.
Following the meeting, the Ministry of Textiles asked SGCCI to submit a detailed note. The ministry will examine the proposal before taking the next decision.
