The diesel price increase, imposed by the Government of India has dampened the festive hopes of Surat-based synthetic textile industry that ships over 7,000 tonnes of sarees, dress materials and other fabric to different parts of the country, says a BS report.
While retail demand has already slackened business for the synthetic industry by 30 percent, a 10-15 percent surge in prices in textile products is feared to reduce demand during the upcoming festive season, noted the report.
"In Surat, diesel prices have increased by Rs 6.27 per litre including value added tax (VAT). Truckers have already jacked up prices for their transportation by 10-15 percent. This may hit the festive demand if no correction occurs till then," Devkishan Manghani, General Secretary of Federation of Surat Textile Traders Association (FOSTTA), was quoted as saying by the report.
Apart from finished goods like sarees and dress materials, the Surat-based industry also dispatches synthetic fabrics to garment manufacturing regions across the industry. However, the demand for such fabrics by garment manufacturers is also slowing down for the Surat industry, the report pointed out.
Yuvraj Desale, President of Surat Textile Goods Transport Association (STGTA) said: "A week ago, a dispatch from Ahmedabad to Madurai - one of the garment conversion centres - was priced at Rs 55,000 per truck. Today, it costs Rs 58,000. While we had to hike the prices post diesel price rise, the demand for Surat's synthetic fabric is taking a hit and may get worse during the upcoming festive season".
STGTA, which has around 350 transport companies as its members, has also seen a decline in daily truck dispatches due to slack in demand, informed the report. 'Last year, as a built-up to the festivals, the monsoon season saw a daily dispatch of 1,300-1,400 trucks. However, the slack in demand has brought this down this year to 700-750 trucks a day', Desale added. According to Desale, each truck carries an average textile goods weighing 10 tonnes or worth Rs 50 lakhs a day, added the report.