Textile entrepreneurs from the country's biggest man-made fabric (MMF) hub of Surat are concern over the rising crude oil price and imposing of the anti dumping duty on polyester yarn.

Rise in crude oil price in Asia due to continuous violence in Iraq, yarn manufacturers have increased the prices of yarn by Rs 4 per kilogram. While with the anti-dumping duty on polyester yarn, the basic raw material for Surat’s MMF sector, the local weavers in the powerloom sector has to heavily depend on domestic manufacturers.

Around 6.5 lakh powerloom machines weave more than 3 crore metre of fabric per day in the city. The textile traders in the biggest MMF hub sell around Rs 110 crore worth of fabrics, including finished saris, dress materials, home furnishing fabrics etc.

The rising crude oil prices and the Union Ministry of Commerce and Industry's anti-dumping duty on Purified Terephthalic Acid (PTA) — a raw material derived from crude oil to manufacture yarn chips — are weighing heavy on Indian polyester industry. The levy was imposed on June 19.

Industry sources said that the crude oil price rise has a direct impact on the MMF industry. The polyester yarn prices are likely to increase in the coming days with local spinners finding it difficult to adjust the escalating cost of procuring the raw material required to manufacture the polyester yarn. This will have a cascading effect on MMF fabric prices with prices of saris and dress materials likely to witness an increase of at least 20 per cent.

The weaving sector in Surat is already facing problem over shortage of workers. With rise in crude oil prices the weavers will not be able to cope up with the rise in yarn prices. They only hope the crude oil prices will go down soon, or else the weaving sector will have to face tough days ahead, said Ashok Jirawala, president, Federation of Gujarat Weavers Association.

At present, the crude prices are between $115 to $120 per barrel and are likely to increase up to $200 per barrel with the Iraq crisis not likely to end soon. The weavers will have to pass on the price rise in polyester yarn to the textile traders, which in turn will make the finished fabrics like saris and dress materials costlier.