Had the Indian rupee been a living being, Anjum Ahad would have filed an FIR against it.
“I would have registered an attempt to murder case against it,” said Ahad who has been effectively run out of his handloom silk business, thanks to the currency’s plunge to unfathomed depths in recent months.
The famed Bhagalpur silk industry is tethering at the edge of precipice, what with a vertical rise in the cost of its main input, the imported yarn/fibre, owing to the rupee’s relentless slide against the US dollar.
“What this means is the silk fabric production cost has become prohibitive and the industry, governed by small players, is in no position to pass on the rise to the consumer”, complained Ahad, a low-on-capital loom owner.
Ahad is not alone. It’s virtually doomsday in this south-eastern Bihar district where many a hearth is fired by the production of silk fabrics, furnishing items and upholstery, catering to domestic and overseas markets.
“With the rise of the US $, the rate of different counts (quality) of linen yarn has gone up by Rs. 50-70 per kilogram. This is killing us”, said Ebrar Ansari, chairman, Bhagalpur regional handloom weavers’ cooperative union.
This, he said, was a double whammy. “On the one hand, it’s near impossible to service supply orders that were confirmed before the yarn prices shot up. On the other, new orders have dried up”, Ansari explained.
This was mainly because buyers were not ready to take deliveries at the higher rates that were being quoted by producers, due to increased production cost.
Ansari said supply orders for over 2.5 lakh metres of linen fabrics were due since before the rupee slide. Meeting these commitments would cause Rs. 10-15 crore loss to industry, already groaning under the weight of overheads.
“However, fearing loss of credibility and business, a number of producers have been trying to meet their commitments, even if this means they have to sustain huge losses”, Ansari said.
Local silk producer Alim Ansari said high demand for silk linen since 2008 had given a new lease of life to the industry. This over-dependence was now bringing much sorrow to the weavers.
“With this accounting for over 70% production of handlooms and power looms, there’s simply no escape from the rupee woes,” Alim Ansari said. All this meant was less work and lower wages for poor weavers,” he said.
Samar Firdos, owner of ‘Farah and Firdos’ label, said the slide of the rupee was “less telling” in the case of imported yarn used for tassar as “the rates of Chinese yarn used for it had earlier climbed by Rs. 4,000-4,500 per kg”.
Ratan Bhalotia, a linen yarn wholesaler here said from an average of more than 50 tonnes, the consumption of linen yarn in the industry has dropped to 30 tonnes, following the price increase.
Bhagalpur divisional commissioner Minhaz Alam said the administration could do little to cap the adverse impact of the sliding rupee. “But we are examining if local yarn can be made available to the industry to substitute the imported yarn”, he told HT.