Surat textile sector weavers to take 2 days off weekly:Yarn payments mandatory within 15 days before Diwali; goods still not selling in market

With Diwali just days away, Surat’s weaving industry is facing a severe financial crisis. Despite the textile hub usually witnessing a surge in activity before the festival, demand has remained weak this year. The cost of production has increased sharply due to a sustained rise in yarn prices, the primary raw material for weaving units. At the same time, grey fabric is not commanding a reasonable price in the market, while purchases have fallen drastically. To prevent further losses, weaving units in Surat have decided to suspend production for two days every week. Yarn prices rise, grey fabric buyers stay away The weaving industry is facing pressure on both fronts. Yarn manufacturers have continued to increase prices, while processors and traders are reluctant to buy grey fabric at prices that cover rising production costs. With finished fabric failing to move in the market, weavers fear that their working capital could get blocked. As a result, most units have stopped purchasing fresh yarn to limit further losses. High yarn prices and weak demand force weavers to cut production Mahendra Ramolia, a Weavers Association leader, said the condition of Surat’s weaving industry has deteriorated significantly, prompting the decision to keep units closed for two days every week. He said high yarn prices and weak purchases of grey fabric are the main reasons behind the move. Yarn payments have to be made every 15 days, including during the Diwali period, while demand for grey fabric remains weak. Continuing production at the current level could result in substantial losses, making the reduction in working days necessary. 15-day payment cycle puts additional pressure on weavers Weavers are also struggling with a mismatch between payments and revenue. Under the existing system, yarn payments have to be made in cash within 15 days of purchase, while payments for finished grey fabric may take months to arrive. The financial pressure increases ahead of Diwali, when factory owners have to pay workers’ salaries, annual bonuses and other expenses. Continuing production without adequate sales could create a severe cash-flow crunch, forcing units to cut operating days. Two-day weekly shutdown aimed at reducing electricity bills The decision to shut factories for two days a week is primarily aimed at controlling costs and preserving working capital. Fewer operating days will reduce electricity consumption and help weavers lower electricity bills running into lakhs of rupees. The move will also reduce labour and production expenses. Weavers have opted to cut production in an attempt to contain losses and maintain cash flow, with the slowdown likely to have an impact across Surat’s textile value chain.