Slowdown in sugar, textile, diamond industries in south Gujarat

Surat

Bhiwandi strike may hit Surat textile industry

Due to overstock of grey and no growth in demand of polyester, cotton and sponge fabric the textile industry in Bhivandi will cut down the production with effect from 16 August.

Bhivandi has 8 lakh looms and enough stock for sell upto Diwali season. Weavers union has issued appeal to not to sell grey stock at cheaper prices and not to transport grey at prices lower than production cost.

This decision may hit Surat based textile industry because it will increase costing of grey for traders in Surat, the city that receives daily 1-1.25 crore meter cotton/sponge/polyester quality grey textile(Rs 10-20/meter) which is mainly used in dress material and dupatta. Bhivandi grey is processed in Surat.

Sugar factories in crisis

Newly appointed office bearers of various sugar factories across south Gujarat called on Gujarat Chief Minister and Finance Minister in Gandhinagar. They wanted some relief from the government over vat and tax(on purchase of sugarcane) but they were promised none during these meetings. Not a single sugar factory in south Gujarat is capable to release salary of employees at present. In September they will need to pay third and the last installment of payment to farmers. But how they will be able to make this payment is a big question. It should be mentioned that as many as 4.5 lakh families depend on such payment.

Soul search over slow down in diamond industry

In a seminar held to discuss how to come out of slow down in diamond business, leading diamond trader Sevantibhai Shah said that traders started taking bank loan instead of cash payment practice. Due to increased burden of bank loans, the number of defaulters also increased and payment was stuck. He pointed out that due to growing practice of receiving loan from abroad at lower interest rate, there was huge new investment in rough purchase. Due to artificial demand in rough, unhealthy competition was seen. In this condition, the prices of rough increased steadily in last three-four years, against which the prices of polished diamonds remained same. Investment by diamond traders in other industries also hurt the market. Practice of acting as dealer of rough diamond also caused damage. In last few years, China expanded steadily with new stores and therefore new demands, but majority of stock didn’t reach buyers and continued to remain only inside the stores. People now wish for certificates, the process of which takes four months period. While local traders believed that demand will be same or it will increase, China applied brakes on unofficial trading. On the other hand, mining companies kept prices of rough stable which supported polished diamond’s price. DTC ad other companies released 75% stock of rough which also proved helpful. Traders decreased production which narrowed down the gap between demand and supply.

– DeshGujarat