However, while a rise in orders closer to the festive season has come as a respite for the Surat-based textile industry, the Covid cases trends in the country is a worrying sign
A spike in orders closer to the festive season
has brought some respite for the Surat-based textile industry, which is reeling under sub-optimal business amid the current Covid-19 pandemic.
Led largely by urban areas, the period from September to November or at times December witnesses orders rising out of festive and wedding demand. According to Narain Agarwal of Synthetic and Rayon Textiles Export Promotion Council (SRTEPC), in a normal year festive orders form nearly 50 per cent of the industry's total annual turnover.
"Business has been better compared to the first few months of lockdown.
In recent weeks, there has been a spike in festive orders which has come as a respite for the industry. Though it is far from what it is in a normal year. For instance, as compared to last year, festive orders are at around 40 per cent," said Agarwal.
In the pre-demonetisation era, cyclical ups and downs notwithstanding, Surat's synthetic textile industry
boasted of a 40 million metres per day production, one of the largest in the country, largely led by small and medium units and traders. What fell to around 25 million metres per day since note ban is yet to recover till this day. However, post lockdown
this year, capacity utilisation has recovered anywhere from 40 per cent to 60 per cent, depending on the value chain, be it spinning, weaving or processing.
"Festive orders have been good. There has been some revival in festive orders since over couple of weeks. But there is still a heavy shortage of workers. As a result, while demand is good, production is only 30-40 per cent of that demand. For instance, the weaving industry in the textile value chain is working at only 30 per cent capacity. Nearly 60 per cent workers are yet to come," said Ashish Gujarati, president of Pandesara Weavers' Association.
However, while a rise in orders closer to the festive season
has come as a respite for the Surat-based textile industry, the Covid cases trends in the country is a worrying sign. Though festive orders have risen in the last couple of weeks to 40 per cent of a normal year, the industry is apprehensive the continuing trend of the pandemic in the country may play a spoilsport during the peak of the festive season.
"There are mainly two seasons for the textile industry.
The March to May period which is summer season and September to November which is the winter season. During summer season, the orders are largely from rural and semi-urban areas on account of wedding as well as agri income from the previous harvest season. The winter season, on the other hand, sees more urban demand. Of late, rural demand has been there but how much urban demand will be there is still to be seen. Since, so far most of the Covid cases is still seen largely in the urban areas. This can affect the demand to a large extent in terms of festive orders," Agarwal said.
It is, however, the traders at the large textile markets in Surat that correspond with buyers for orders. However, according to several traders, though a lot of such correspondence has moved to virtual platforms, the spike in festive orders seems hard to sustain.
"Despite the recent spike, order books are still quite weak compared to last year and only 30-35 per cent of normal year. Also, given the way Covid cases are still rising across the country, there doesn't seem to be much optimism. It seems unlikely to grow from here given the rate of cases. Demand is also getting subdued due to reduced social gatherings, wedding and other occasions that call for retail demand of textiles," said Devkishan Manghani of Federation of Surat Textile Traders' Association (FOSTTA).