Sharp increase in yarn prices have hit the powerloom units very badly and most of suppliers have now decided to cut production by downing their shutters once in a week to stay in the business by avoiding huge losses.

"We are trying our best to clock a handsome business ahead of Diwali. But, we are finding it difficult to meet the orders as yarn prices have gone up," said K Suresh, president of Erode Powerloom Owners Association (EPOA).

In the current scenario powerloom weavers were forced to up the prices of their products and as a result sales have come down. The buyers are reluctant to pay more.

There are more than one lakh powerloom units in Erode district and Pallipalayam and Kumarapalayam in Namakkal district. They usually use cotton and Viscose Rayon yarns to make the products.

Six months back, 1kg of Viscose Rayon yarn was priced at 193. "Now, it has increased to 215," said B Kandavel, executive member of EPOA. When it comes to bulk deals, he said, the rise in prices would affect our profit margins. Similarly, the price of 1kg of cotton yarn has also shot up to 205 from 170.

Usually, powerloom units do brisk business during Diwali time. But this year, business is dull for most units. "About 60% of the units have decided to stop production for one day in a week," Kandavel said, adding that the remaining units would continue to work around the week as they have bagged tenders from the state government for its free dhoti and sari scheme.

Most powerloom unit owners refuse to take more orders, citing rise in yarn price. "Because of the price hike, we have decided not to opt for Viscose Rayon and cotton yarns," the powerloom unit owners said. But, the move would hit the units and eventually force them shut the units. They have decided to take up the issue with both the state and Central governments.