The Hindu : Front Page : Stronger rupee weakens Karur textile business

Online edition of India's National Newspaper
Thursday, Oct 18, 2007
ePaper

Front Page

Front Page

Stronger rupee weakens Karur textile business

L. Renganathan

Only a handful
of orders have
been finalised
New works have
not been taken up
by many units

KARUR: With the rupee rising against the US dollar and the international currency market’s appetite for risk sending the Euro soaring against dollar, yen and sterling, local textile exporters are feeling the pinch more than ever before.

They fear the worst is not yet over and the negatives ranging from loss of orders for the lucrative Spring-Summer 2008 to loss of jobs of local workers haunt the exporters.

With the rupee continuing to post gains in the past few weeks, the textile exporters’ primary concern is about pricing products, especially for the Spring-Summer 2008 season, which usually yields a business of Rs. 800 crore.

Only a handful of orders have been finalised. Production should have begun to meet the season’s demand, but that has not happened except in a few cases.

New works have not been taken up by many units in the past two months. Only existing orders have been scheduled.

“The problem might turn acute if the situation continues for a few weeks,” says newly-elected secretary of Karur Textile Manufacturer Exporters’ Association P. Gopalakrishnan.

The Central Government’s bank credit rate cut of two per cent and duty incentives to exporters have helped only marginally, according to Mr. Gopalakrishnan.

A major fallout of the crisis, as the exporters describe it, is the job cut for thousands of workers in textile units. Ancillary units provide direct employment to tens of thousands people from Karur and surrounding areas whose jobs will be on the firing line if new orders do not materialise soon. With Deepavali round the corner, a cash crunch will hit the workers and exporters hard. “High-end product exporters can outlast the crisis, but small and medium exporters as also medium-rung material exporters will suffer unless urgent remedial measures are taken,” says Karur Textile Forum president M. Sivakannan.

Printer friendly page
Send this article to Friends by E-Mail

Front Page